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

Quarterly report pursuant to Section 13 or 15(d)

Investments

Investments

6 Months Ended

Jun. 27, 2020


NOTE 7 :			INVESTMENTS

DEBT INVESTMENTS

Trading Assets

For trading assets still held at the reporting date we recorded net gains of $347 million in the second quarter of 2020 and net gains of $183 million in the first six months of 2020 ($99 million of net gains in the second quarter of 2019 and $117 million of net gains in the first six months of 2019). Net losses on the related derivatives were $251 million in the second quarter of 2020 and net losses of $204 million in the first six months of 2020 ($102 million of net losses in the second quarter of 2019 and $104 million of net losses in the first six months of 2019).

Available-for-Sale Debt Investments


	Jun 27, 2020														Dec 28, 2019
(In Millions)	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Corporate debt	$	3,911	$	94	$	—	$	4,005	$	2,914	$	44	$	—	$	2,958
Financial institution instruments	7,985		24		—		8,009		3,007		15		(1)		3,021
Government debt	2,491		12		—		2,503		560		4		—		564
Total available-for-sale debt investments	$	14,387	$	130	$	—	$	14,517	$	6,481	$	63	$	(1)	$	6,543

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 June 27, 2020 and December 28, 2019.

The fair value of available-for-sale debt investments, by contractual maturity, as of June 27, 2020, was as follows:


(In Millions)	Fair Value
Due in 1 year or less	$	7,763
Due in 1–2 years	1,525
Due in 2–5 years	1,359
Due after 5 years	—
Instruments not due at a single maturity date	3,870
Total	$	14,517

EQUITY INVESTMENTS


(In Millions)	Jun 27, 2020		Dec 28, 2019
Marketable equity securities	$	464	$	450
Non-marketable equity securities	3,419		3,480
Equity method investments	18		37
Total	$	3,901	$	3,967

The components of gains (losses) on equity investments, net for each period were as follows:


	Three Months Ended						Six Months Ended
(In Millions)	Jun 27, 2020		Jun 29, 2019		Jun 27, 2020		Jun 29, 2019
Ongoing mark-to-market adjustments on marketable equity securities	$	165	$	(179)	$	62	$	74
Observable price adjustments on non-marketable equity securities	58		8		137		16
Impairment charges	(51)		(39)		(193)		(62)
Sale of equity investments and other¹	95		380		150		576
Total gains (losses) on equity investments, net	$	267	$	170	$	156	$	604

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.

We recognized higher than historically experienced impairment charges on our non-marketable portfolio in the first six months of 2020 based on our assessment of the impact of recent public and private market volatility and tightening of liquidity.

Gains and losses for our marketable and non-marketable equity securities during the period were as follows:


	Three Months Ended						Six Months Ended
(In Millions)	Jun 27, 2020		Jun 29, 2019		Jun 27, 2020		Jun 29, 2019
Net gains (losses) recognized during the period on equity securities	$	223	$	(178)	$	83	$	84
Less: Net (gains) losses recognized during the period on equity securities sold during the period	(55)		(33)		(58)		(258)
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	168	$	(211)	$	25	$	(174)

IMFT

IMFT was formed in 2006 by Micron Technology, Inc. (Micron) and Intel to jointly develop NAND flash memory and 3D XPoint™ technology products. As of June 29, 2019, we had a carrying value of $1.3 billion in IMFT and owned a 49% interest in the unconsolidated variable interest entity. We sold our non-controlling interest in IMFT to Micron in October 2019. We will continue to purchase product manufactured by Micron at the IMFT facility under supply agreements, which include the next generation of 3D XPoint™ technology.