Quarterly report pursuant to Section 13 or 15(d)

Operating Segment Information

Operating Segment Information
6 Months Ended
Jun. 30, 2012
Operating Segment Information [Abstract]  
Operating Segment Information [Text Block]

Note 22: Operating Segment Information


Our operating segments in effect as of June 30, 2012 include:

  • PC Client Group
  • Data Center Group
  • Other Intel architecture operating segments
  • Intelligent Systems Group
  • Netbook Group
  • Intel Mobile Communications
  • Tablet Group
  • Phone Group
  • Service Provider Group
  • Software and services operating segments
  • McAfee
  • Wind River Software Group
  • Software and Services Group
  • All Other
  • Non-Volatile Memory Solutions Group



In the second quarter of 2012, we reorganized our smartphone, tablet, and mobile communication businesses within other Intel architecture operating segments to enable us to move faster and with greater collaboration and synergies in the market segment for mobile devices. As part of the reorganization, the former Netbook and Tablet Group has been separated into the following new operating segments: Netbook Group, Tablet Group, and Service Provider Group. Additionally, the former Ultra-Mobility Group is now the Phone Group. The other Intel architecture operating segments continue to include the Intelligent Systems Group and Intel Mobile Communications. The other Intel architecture operating segments aggregation has not changed. 


The Chief Operating Decision Maker (CODM) is our President and 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).


Our PC Client Group and our Data Center Group are reportable operating segments. We also aggregate and disclose the financial results of our non-reportable operating segments within “other Intel architecture operating segments” and “software and services operating segments” as shown in the above operating segments list. Each of these aggregated operating segments does not meet the quantitative thresholds to qualify as reportable operating segments; however, we have elected to disclose the aggregation of these non-reportable operating segments. Revenue for our reportable and aggregated non-reportable operating segments is primarily related to the following product lines:

  • PC Client Group. Includes platforms designed for the notebook and desktop (including high-end enthusiast PCs) market segments; and wireless connectivity products.
  • Data Center Group. Includes platforms designed for the server, workstation, and storage computing market segments; and wired network connectivity products.
  • Other Intel architecture operating segments. Includes platforms designed for embedded applications; platforms designed for the netbook market segment; mobile phone components such as baseband processors, radio frequency transceivers, and power management chips; platforms designed for the tablet market segment; platforms designed for the smartphone market segment; and gateway and set top box components.
  • Software and services operating segments. Includes software products for endpoint security, network and content security, risk and compliance, and consumer and mobile security from our McAfee business; software optimized products for the embedded and mobile market segments; and software products and services that promote Intel® architecture as the platform of choice for software development.


We have sales and marketing, manufacturing, finance, and administration groups. Expenses for these groups are generally allocated to the operating segments, and the expenses are included in the operating results reported below.


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

  • results of operations from our Non-Volatile Memory Solutions Group that includes NAND flash memory products for use in a variety of devices;
  • a portion of profit-dependent compensation and other expenses not allocated to the operating segments;
  • results of operations of seed businesses that support our initiatives; 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. 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.


Segment information is summarized as follows:

      Three Months Ended   Six Months Ended
      June 30,   July 2,   June 30,   July 2,
(In Millions) 2012   2011   2012   2011
Net revenue                      
  PC Client Group $ 8,684   $ 8,321   $ 17,135   $ 16,942
  Data Center Group   2,804     2,436     5,257     4,900
  Other Intel architecture operating segments   1,108     1,389     2,183     2,538
  Software and services operating segments   586     511     1,157     751
  All other   319     375     675     748
    Total net revenue $ 13,501   $ 13,032   $ 26,407   $ 25,879
Operating income (loss)                      
  PC Client Group $ 3,416   $ 3,284   $ 6,899   $ 6,827
  Data Center Group   1,389     1,204     2,532     2,426
  Other Intel architecture operating segments   (335)     (33)     (647)     (69)
  Software and services operating segments   14     (14)     21     (66)
  All other   (652)     (506)     (1,163)     (1,025)
    Total operating income $ 3,832   $ 3,935   $ 7,642   $ 8,093