Annual report pursuant to Section 13 and 15(d)

Other Financial Statement Details

v3.24.4
Other Financial Statement Details
12 Months Ended
Dec. 28, 2024
Other Financial Statement Details [Abstract]  
Other Financial Statement Details
Note 6 : Other Financial Statement Details
Accounts Receivable
We sell certain of our accounts receivable on a non-recourse basis to third-party financial institutions. We record these transactions as sales of receivables and present cash proceeds as cash provided by operating activities in the Consolidated Statements of Cash Flows. Accounts receivable sold under non-recourse factoring arrangements were $2.3 billion during 2024, $2.0 billion during 2023, and $665 million during 2022. After the sale of our accounts receivable, we expect to collect payment from the customers and remit it to the third-party financial institution.
Inventories
Years Ended (In Millions)
Dec 28, 2024 Dec 30, 2023
Raw materials $ 1,344  $ 1,166 
Work in process 7,432  6,203 
Finished goods 3,422  3,758 
Total inventories $ 12,198  $ 11,127 
Property, Plant, and Equipment
Years Ended (In Millions)
Dec 28, 2024 Dec 30, 2023
Land and buildings $ 56,544  $ 51,182 
Machinery and equipment 103,150  100,033 
Construction in progress 50,418  43,442 
Total property, plant, and equipment, gross
210,112  194,657 
Less: Accumulated depreciation (102,193) (98,010)
Total property, plant, and equipment, net
$ 107,919  $ 96,647 
Our depreciable property, plant, and equipment assets are depreciated over the following estimated useful lives: machinery and equipment, 3 to 8 years; and buildings, 10 to 25 years.
We invest in and deploy manufacturing assets in response to manufacturing capacity requirements based upon short- and long-term demand forecasts and economic returns relative to capital outlays. We regularly monitor, evaluate, and adjust our manufacturing capacity footprint in response to a number of volatile factors that impact our business, including demand for our products and services and the state of the semiconductor industry as a whole. In connection with the preparation of our Consolidated Financial Statements for the third quarter of 2024, we evaluated our current process technology node capacities relative to projected market demand for our products and services, and concluded that our manufacturing asset portfolio, primarily for our Intel 7 process node, exceeded manufacturing capacity requirements. Upon performing a re-use assessment, we impaired and accelerated depreciation for certain manufacturing assets. In total, we recorded non-cash impairments and accelerated depreciation charges of $2.3 billion and $992 million, respectively, in 2024, substantially all of which were recognized in cost of sales within our Intel Foundry operating segment.
We also incurred certain other non-cash asset impairment charges of $442 million as a direct result of the 2024 Restructuring Plan (see "Note 7: Restructuring and Other Charges" within Notes to Consolidated Financial Statements). These charges were included as a component of "corporate unallocated expenses" within the restructuring and other category presented in "Note 3: Operating Segments" within Notes to Consolidated Financial Statements.
We negotiate extended payment terms of greater than 90 days with certain of our capital vendors, which are reported as financing activities in the Consolidated Statements of Cash Flows when paid. Unpaid amounts related to the acquisition of property, plant, and equipment in 2024 under such extended payment terms, included in accounts payable and other accrued liabilities, totaled $3.2 billion.
Property, plant, and equipment, net, by country at the end of each period was as follows:
Years Ended (In Millions)
Dec 28, 2024 Dec 30, 2023
United States $ 72,068  $ 63,234 
Ireland 18,152  16,746 
Israel 10,414  9,290 
Other countries 7,285  7,377 
Total property, plant, and equipment, net
$ 107,919  $ 96,647 
Government Incentives
We enter into government incentive arrangements with local, regional, and national governments, both US and non-US. These arrangements vary in size, duration, and conditions and allow us to maintain a market-comparable foothold across various geographies. These incentives are primarily structured as cash grants and refundable tax credits. Capital-related incentives have terms of up to 15 years and operating-related incentives have terms that can vary widely. We are eligible to receive these incentives because we engage in qualifying capital investments, R&D, and other activities as defined by the relevant government entities. These include qualifying capital investments for semiconductor wafer and advanced packaging manufacturing facilities construction and acquisition of equipment. Each incentive requires that we comply with certain conditions for a period that may exceed the incentive terms. These conditions can include achievement of future operational targets and committing to minimum levels of capital investment. If conditions are not satisfied, the incentives may be subject to reduction, recapture, or termination. For example, in November 2024 we entered into a direct funding agreement with the US Department of Commerce under the CHIPS Act that contains detailed milestones we must achieve for us to receive the funds, including the achievement of various milestones with respect to capital expenditures, facility completion, process technology development, wafer production, Intel products insourcing, and external foundry customer acquisitions. It also contains restrictions on certain “change of control” transactions we are permitted to engage in, a requirement that we share with the US government project economic returns above specified thresholds, and various termination rights and remedies if we were to breach the agreement, including potential repayment of some or all of the awards.
Capital-related incentives reduced gross property, plant, and equipment by $9.5 billion as of December 28, 2024 ($5.5 billion as of December 30, 2023), of which $4.1 billion was recognized in 2024 ($2.2 billion in 2023). Capital-related incentives reduced depreciation expense by $594 million in 2024, of which the substantial majority reduced cost of sales ($226 million in 2023, substantially all of which reduced cost of sales, and $230 million in 2022, all of which reduced cost of sales). Of our total capital-related government incentives recognized in 2024, $3.3 billion was recognized as a non-cash investing activity ($1.1 billion in 2023 and $128 million in 2022). Related incentives recognized during each period consisted of the following:
US federal government pursuant to the CHIPS Act. In September 2024, we were awarded up to $3.0 billion in direct funding for the Secure Enclave program to expand the trusted manufacturing of leading-edge semiconductors for the US government. In November 2024, we signed a Direct Funding Agreement with the US Department of Commerce for the award of $7.9 billion in government incentives. We recognized $1.3 billion of grants, including $253 million of operating grants, in 2024 under the CHIPS Act. Additionally, we recognized an advanced manufacturing investment tax credit of $2.6 billion in 2024 ($845 million in 2023), which may be refunded to us in cash to the extent it exceeds our outstanding income tax liabilities.
US state governments. We recognized $115 million of grants in 2024 related to modernization and expansion of chip factories in Oregon ($723 million in 2023 related to two new leading-edge chip factories in Ohio).
Non-US governments. We recognized $384 million of grants and refundable tax credits in 2024 ($645 million in 2023), substantially all and a majority of which, respectively, related to the expansion of silicon wafer manufacturing facilities in Ireland.
Operating-related incentives, including those recognized under the CHIPS Act, benefited operating income by $442 million in 2024, the substantial majority of which was recorded in cost of sales ($202 million in 2023 and $104 million in 2022, a majority of which was recorded in cost of sales in both periods).
The amounts recorded on the Consolidated Balance Sheets related to grants receivable and capital-related refundable tax credits for each period were as follows:
Years Ended (In Millions)
Location
Dec 28, 2024 Dec 30, 2023
Operating-related grants receivables
Other current assets
$ 272  $ 17 
Other long-term assets
$ 186  $ 130 
Capital-related grants receivables
Other current assets
$ 859  $ 64 
Other long-term assets
$ 374  $ 348 
Capital-related refundable tax credits
Other current assets
$ 2,099  $ — 
Capital-related refundable tax credits
Income taxes payable
$ —  $ 365 
Advertising
Advertising costs, including direct marketing, are expensed as incurred and recorded within MG&A expenses. Advertising costs were $856 million in 2024 ($950 million in 2023 and $1.2 billion in 2022).
Interest and Other, Net
Years Ended (In Millions) Dec 28, 2024 Dec 30, 2023 Dec 31, 2022
Interest income $ 1,245  $ 1,335  $ 589 
Interest expense (1,034) (878) (496)
Other, net 15  172  1,073 
Total interest and other, net $ 226  $ 629  $ 1,166 
Interest expense is net of $1.5 billion of interest capitalized in 2024 ($1.5 billion in 2023 and $785 million in 2022).
Other, net in 2024 includes a $755 million loss from the change in fair value of a derivative related to Ireland SCIP and $560 million of interest received and recognized as a benefit in 2024 in relation to the European Commission competition matter that was recorded and paid in 2009 and refunded to us in 2022. Other, net in 2022 included a $1.0 billion gain recognized from the first closing of the divestiture of our NAND memory business