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

Quarterly report pursuant to Section 13 or 15(d)

Investments

Investments

9 Months Ended

Sep. 26, 2020


NOTE 7 :			INVESTMENTS

DEBT INVESTMENTS

Trading Assets

Net gains recorded for trading assets still held at the reporting date were $205 million in the third quarter of 2020 and $347 million in the first nine months of 2020 ($75 million of net losses in the third quarter of 2019 and $21 million of net gains in the first nine months of 2019). Net losses on the related derivatives were $163 million in the third quarter of 2020 and $334 million in the first nine months of 2020 ($81 million of net gains in the third quarter of 2019 and $7 million of net losses in the first nine months of 2019).

Available-for-Sale Debt Investments


	Sep 26, 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	$	2,077	$	92	$	—	$	2,169	$	2,914	$	44	$	—	$	2,958
Financial institution instruments	3,431		20		—		3,451		3,007		15		(1)		3,021
Government debt	1,604		12		—		1,616		560		4		—		564
Total available-for-sale debt investments	$	7,112	$	124	$	—	$	7,236	$	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 September 26, 2020 and December 28, 2019.

The fair value of available-for-sale debt investments, by contractual maturity, as of September 26, 2020, was as follows:


(In Millions)	Fair Value
Due in 1 year or less	$	3,504
Due in 1–2 years	1,450
Due in 2–5 years	1,270
Due after 5 years	—
Instruments not due at a single maturity date	1,012
Total	$	7,236

EQUITY INVESTMENTS


(In Millions)	Sep 26, 2020		Dec 28, 2019
Marketable equity securities	$	481	$	450
Non-marketable equity securities	3,189		3,480
Equity method investments	9		37
Total	$	3,679	$	3,967

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


	Three Months Ended						Nine Months Ended
(In Millions)	Sep 26, 2020		Sep 28, 2019		Sep 26, 2020		Sep 28, 2019
Ongoing mark-to-market adjustments on marketable equity securities	$	(146)	$	114	$	(84)	$	188
Observable price adjustments on non-marketable equity securities	5		84		142		100
Impairment charges	(40)		(17)		(233)		(79)
Sale of equity investments and other¹	237		137		387		713
Total gains (losses) on equity investments, net	$	56	$	318	$	212	$	922

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 nine 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						Nine Months Ended
(In Millions)	Sep 26, 2020		Sep 28, 2019		Sep 26, 2020		Sep 28, 2019
Net gains (losses) recognized during the period on equity securities	$	19	$	281	$	102	$	366
Less: Net (gains) losses recognized during the period on equity securities sold during the period	(12)		(54)		(87)		(321)
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	7	$	227	$	15	$	45

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 September 28, 2019, we had a carrying value of $1.1 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 under our supply agreement, which includes the next generation of 3D XPoint™ technology.