Intel Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Investments

Investments

12 Months Ended

Dec. 26, 2020


Note 9 :			Investments

Debt Investments

Trading Assets

Net gains related to trading assets still held at the reporting date were $694 million in 2020 (net gains of $26 million in 2019 and net losses of $188 million in 2018). Net losses on the related derivatives were $667 million in 2020 (net gains of $22 million in 2019 and net gains of $163 million in 2018).

Available-for-Sale Debt Investments

Available-for-sale investments include corporate debt, government debt, and financial institution instruments. 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. As of December 26, 2020 and December 28, 2019, substantially all time deposits were issued by institutions outside the U.S. The adjusted cost of our available-for-sale investments was $7.8 billion as of December 26, 2020 and $6.5 billion as of December 28, 2019. The adjusted cost of our available-for-sale investments approximated the fair value for these periods.

The fair values of available-for-sale debt investments by contractual maturity as of December 26, 2020 were as follows:


(In Millions)	Fair Value
Due in 1 year or less	$	2,978
Due in 1–2 years	1,093
Due in 2–5 years	1,099
Due after 5 years	—
Instruments not due at a single maturity date	2,781
Total	$	7,951

Equity Investments


(In Millions)	Dec 26, 2020		Dec 28, 2019
Marketable equity securities	$	1,830	$	450
Non-marketable equity securities	3,304		3,480
Equity method investments	18		37
Total	$	5,152	$	3,967

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


Years Ended (In Millions)	Dec 26, 2020		Dec 28, 2019		Dec 29, 2018
Ongoing mark-to-market adjustments on marketable equity securities	$	(133)	$	277	$	(129)
Observable price adjustments on non-marketable equity securities	176		293		202
Impairment charges	(303)		(122)		(424)
Sale of equity investments and other 1	2,164		1,091		226
Total gains (losses) on equity investments, net	$	1,904	$	1,539	$	(125)

1 Sale of equity investments and other includes initial fair value adjustments recorded upon a security becoming marketable, realized gains (losses) on sales of non-marketable equity investments, and our share of equity method investee gains (losses) and distributions.

In 2020, we recognized higher than historically experienced impairment charges on our non-marketable portfolio based on our assessment of the impact of recent public and private market volatility and tightening of liquidity. We recognized impairments of $290 million on non-marketable equity securities in 2020 ($122 million in 2019 and $132 million in 2018).

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



(In Millions)	Dec 26, 2020		Dec 28, 2019		Dec 29, 2018
Net gains (losses) recognized during the period on equity securities	$	1,679	$	734	$	298
Less: Net (gains) losses recognized during the period on equity securities sold during the period	(254)		(424)		(445)
Net unrealized gains (losses) recognized during the period on equity securities still held at the reporting date	$	1,425	$	310	$	(147)

As of December 28, 2019, Intel owned $307 million of shares in Cloudera, all of which we sold in 2020. As of December 29, 2018, Intel owned $1.1 billion of shares in ASML, all of which we sold in 2019.

IMFT

IMFT was formed in 2006 by Micron Technology, Inc. (Micron) and Intel to jointly develop NAND and 3D XPoint technology products. We owned a 49% interest in the entity.

Upon Micron's notice of intent to exercise its right to call our interest in IMFT, we recognized an impairment charge of $290 million related to our investment in the third quarter of 2018. In 2019, Micron exercised its right and we sold our non-controlling interest in IMFT to Micron. We received $1.7 billion in sales proceeds and certain other repayments from Micron during 2019 and reported a gain of $107 million. We continue to purchase products manufactured by Micron at the IMFT facility under our supply agreement, which includes the next generation of 3D XPoint technology.

McAfee

McAfee completed its initial public offering in October 2020. Due to our 40% ownership and significant influence as of December 26, 2020, we account for it as an equity method investment. We had no accounting carrying value as of December 26, 2020 and as of December 28, 2019. During 2020, we received $126 million in dividends ($632 million in 2019).