Note 19: Operating Segments Information
Our operating segments in effect as of March 30, 2013 include:
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• PC Client Group |
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• Software and services operating segments |
• Data Center Group |
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• McAfee |
• Other Intel architecture operating segments |
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• Wind River Software Group |
• Intelligent Systems Group |
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• Software and Services Group |
• Intel Mobile Communications |
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• All Other |
• Tablet Group |
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• Non-Volatile Memory Solutions Group |
• Phone Group |
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• Service Provider Group |
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• Netbook Group |
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In the first three months of 2013, we completed a reorganization that transferred a portion of our wired connectivity business formerly included within the DCG to the PCCG, as the technology from that portion of the business is primarily used for client connectivity. Prior period amounts have been adjusted retrospectively to reflect this new organization structure.
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 PCCG and our DCG 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:
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PC Client Group. Includes platforms designed for the notebook (including Ultrabook™ systems and convertibles) and desktop (including high-end enthusiast PCs) market segments; wireless and wired connectivity products.
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Data Center Group. Includes platforms designed for the server, workstation, and storage computing market segments; and wired network connectivity products.
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Other Intel architecture operating segments. Includes platforms designed for embedded applications; 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; gateway and set-top box components; and platforms designed for the netbook market segment.
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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.
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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:
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results of operations from our Non-Volatile Memory Solutions Group that includes NAND flash memory products for use in a variety of devices; |
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a portion of profit-dependent compensation and other expenses not allocated to the operating segments; |
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divested businesses for which discrete operating results are not reviewed by our CODM; |
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results of operations of start-up businesses, including our foundry business, that support our initiatives; and |
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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. 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 during each period was as follows:
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Three Months Ended |
(In Millions) |
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Mar 30,
2013 |
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Mar 31,
2012 |
Net revenue |
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PC Client Group |
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$ |
7,992 |
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$ |
8,499 |
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Data Center Group |
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2,585 |
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2,405 |
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Other Intel architecture operating segments |
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978 |
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1,075 |
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Software and services operating segments |
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588 |
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571 |
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All other |
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437 |
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356 |
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Total net revenue |
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$ |
12,580 |
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$ |
12,906 |
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Operating income (loss) |
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PC Client Group |
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$ |
2,513 |
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$ |
3,491 |
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Data Center Group |
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1,079 |
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1,135 |
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Other Intel architecture operating segments |
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(611 |
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(312 |
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Software and services operating segments |
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(24 |
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7 |
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All other |
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(438 |
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(511 |
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Total operating income |
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$ |
2,519 |
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$ |
3,810 |
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