# UNITED	STATES	SECURITIES	AND	EXCHANGE	COMMISSION

# (Mark	One)

# ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# For	the	fiscal	year	ended	December	28,	2013.

¨ TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# INTEL	CORPORATION

(Exact	name	of	registrant	as	specified	in	its	charter)

State	or	other	jurisdiction	of incorporation	or	organization

2200	Mission	College	Boulevard,	Santa	Clara,	California

(Address	of	principal	executive	offices)

(I.R.S.	Employer Identification	No.)

(Zip	Code)

Registrant's	telephone	number,	including	area	code (408)	765-8080 Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

# Title	of	each	class

# Name	of	each	exchange	on	which	registered

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.				Yes	x		No	¨

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.				Yes	¨		No	x

Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the	preceding	12	months (or	for	such	shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.				Yes	x		No	¨

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Web	site,	if	any,	every	Interactive	Data	File	required	to	be	submitted	and	posted pursuant	to	Rule	405	of	Regulation	S-T	(§	232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	and	post	such files).				Yes	x		No	¨

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§229.405	of	this	chapter)	is	not	contained	herein,	and	will	not	be	contained,	to	the	best of	registrant's	knowledge,	in	definitive	proxy	or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.				¨

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company.	See	the	definitions	of	"large accelerated	filer,"	"accelerated	filer"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.

Large	accelerated	filer		x

Accelerated	filer		¨

Non-accelerated	filer		¨

Smaller	reporting	company		¨

(Do	not	check	if	a	smaller	reporting	company)

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Act).				Yes	¨		No	x

Aggregate	market	value	of	voting	and	non-voting	common	equity	held	by	non-affiliates	of	the	registrant	as	of	June	28,	2013,	based	upon	the	closing	price	of	the	common	stock	as reported	by	The	NASDAQ	Global	Select	Market*	on	such	date,	was

4,972	million	shares	of	common	stock	outstanding	as	of	February	7,	2014

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	registrant's	Proxy	Statement	related	to	its	2014	Annual	Stockholders'	Meeting	to	be	filed	subsequently	are	incorporated	by	reference	into	Part	III	of	this	Annual	Report on	Form	10-K.	Except	as	expressly	incorporated	by	reference,	the	registrant's	Proxy	Statement	shall	not	be	deemed	to	be	part	of	this	report.

# INDEX

|  | PART	I |  |
| :--- | :--- | :--- |
| Item\t1. | Business | 1 |
| Item\t1A. | Risk\tFactors | 17 |
| Item\t1B. | Unresolved\tStaff\tComments | 24 |
| Item\t2. | Properties | 24 |
| Item\t3. | Legal\tProceedings | 24 |
| Item\t4. | Mine\tSafety\tDisclosures | 24 |
|  | PART\tII |  |
| Item\t5. | Market\tfor\tRegistrant's\tCommon\tEquity,\tRelated\tStockholder\tMatters\tand\tIssuer\tPurchases\tof\tEquity\tSecurities | 25 |
| Item\t6. | Selected\tFinancial\tData | 27 |
| Item\t7. | Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 28 |
| Item\t7A. | Quantitative\tand\tQualitative\tDisclosures\tAbout\tMarket\tRisk | 47 |
| Item\t8. | Financial\tStatements\tand\tSupplementary\tData | 49 |
| Item\t9. | Changes\tin\tand\tDisagreements\tWith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 110 |
| Item\t9A. | Controls\tand\tProcedures | 110 |
| Item\t9B. | Other\tInformation | 110 |
|  | PART\tIII |  |
| Item\t10. | Directors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | 111 |
| Item\t11. | Executive\tCompensation | 111 |
| Item\t12. | Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | 112 |
| Item\t13. | Certain\tRelationships\tand\tRelated\tTransactions,\tand\tDirector\tIndependence | 113 |
| Item\t14. | Principal\tAccounting\tFees\tand\tServices | 113 |
|  | PART\tIV |  |
| Item\t15. | Exhibits,\tFinancial\tStatement\tSchedules | 114 |

Table	of	Contents

# PART	I

# ITEM	1. BUSINESS

# Company	Overview

We	design	and	manufacture	advanced	integrated	digital	technology	platforms.	A	platform	consists	of	a	microprocessor	and	chipset,	and	may	be	enhanced by	additional	hardware,	software,	and	services.	We	sell	these	platforms	primarily	to	original	equipment	manufacturers	(OEMs),	original	design manufacturers	(ODMs),	and	industrial	and	communications	equipment	manufacturers	in	the	computing	and	communications	industries.	Our	platforms	are used	in	a	wide	range	of	computing	applications,	such	as	notebooks	(including	Ultrabook™	devices	and	2	in	1	systems),	desktops,	servers,	tablets, smartphones,	automobile	infotainment	systems,	automated	factory	systems,	and	medical	devices.	We	also	develop	and	sell	software	and	services primarily	focused	on	security	and	technology	integration.	We	were	incorporated	in	California	in	1968	and	reincorporated	in	Delaware	in	1989.

# Company	Strategy

Our	goal	is	to	be	the	preeminent	computing	solutions	company	that	powers	the	worldwide	digital	economy.	Over	time,	the	number	of	devices	connected	to the	Internet	and	each	other	has	grown	from	hundreds	of	millions	to	billions,	and	the	variety	of	devices	also	continues	to	increase.	The	combination	of embedding	computing	into	devices	and	connecting	them	to	the	Internet,	known	as	the	Internet	of	Things,	as	well	as	a	build-out	of	the	cloud	infrastructure supporting	these	devices	is	driving	fundamental	changes	in	the	computing	industry.	As	a	result,	we	are	transforming	our	primary	focus	from	the	design and	manufacture	of	semiconductor	chips	for	personal	computing	(PC)	and	servers	to	the	delivery	of	solutions	consisting	of	hardware	and	software platforms	and	supporting	services	across	a	wide	range	of	computing	devices.	Examples	of	these	solutions	can	be	seen	across	the	computing	continuum, from	the	teraflops	of	operations	per	second	for	high	performance	computing	(HPC)	to	the	milliwatts	of	energy	consumed	by	an	embedded	application. Additionally,	computing	is	becoming	an	increasingly	mobile,	personal,	and	ubiquitous	experience.	End	users	value	consistency	across	devices	that connect	seamlessly	and	securely	to	the	Internet	and	to	each	other.	We	enable	this	experience	by	innovating	around	energy-efficient	performance, connectivity,	and	security.

To	succeed	in	this	changing	computing	environment,	we	have	the	following	key	objectives:

•strive	to	ensure	that	Intel ®	technology	is	the	best	choice	for	any	computing	device,	including	PCs,	data	centers,	cloud	computing,	ultra-mobile	devices, and	wearables;

•be	the	platform	of	choice	for	any	operating	system;

•maximize	and	extend	our	manufacturing	technology	leadership;

•extend	to	adjacent	services	such	as	security,	cloud,	and	foundry;

•expand	platforms	into	adjacent	market	segments	to	bring	compelling	new	System-on-Chip	(SoC)	solutions	and	user	experiences	to	ultra-mobile	form factors	including	smartphones	and	tablets,	as	well	as	notebooks	(including	Ultrabook	devices	and	2	in	1	systems),	embedded	systems,	and microserver	applications;

•develop	platforms	to	enable	devices	that	connect	to	the	Internet	of	Things	and	to	each	other	to	create	a	computing	continuum	offering	consumers	a set	of	secure,	consistent,	engaging,	and	personalized	forms	of	computing;	and

•strive	to	lower	the	footprint	of	our	products	and	operations	as	well	as	be	an	asset	to	the	communities	we	work	in.

We	use	our	core	assets	to	meet	these	objectives.	Our	core	assets	include	our	silicon	and	manufacturing	technology	leadership,	our	architecture	and platforms,	our	software	and	services,	our	security	solutions,	our	customer	orientation,	our	strategic	investments,	and	our	corporate	stewardship.	We believe	that	applying	these	core	assets	to	our	key	objectives	provides	us	with	the	scale,	capacity,	and	global	reach	to	establish	new	technologies	and respond	to	customers'	needs	quickly.	Our	core	assets	and	key	objectives	include	the	following:

•Silicon	and	Manufacturing	Technology	Leadership.	We	have	long	been	a	leader	in	silicon	process	technology	and	manufacturing,	and	we	aim	to continue	our	lead	through	investment	and	innovation	in	this	critical	area.	We	drive	a	regular	two-year	upgrade	cycle—introducing	a	new microarchitecture	approximately	every	two	years	and	ramping	the	next	generation	of	silicon	process	technology	in	the	intervening	years.	We	refer	to this	as	our	"tick-tock"	technology	development	cadence.	With	our	continued	focus	on	silicon	and	manufacturing	technology	leadership,	we	are collaborating	on	the	development	of	450-millimeter	(mm)	wafer	technology	and	extreme	ultraviolet	lithography	(EUV).	We	expect	larger	silicon	wafers and	enhanced	lithography	technologies	with	EUV	to	allow	Moore's	Law	to	continue.	Moore's	Law	predicted	that	transistor	density	on	integrated	circuits would	double	about	every	two	years.	We	aim	to	have	the	best	process	technology,	and	unlike	many	semiconductor	companies,	we	primarily manufacture	our	products	in	our	own	facilities.	This	in-house	manufacturing	capability	allows	us	to	optimize	performance,	shorten	our	time	to	market, and	scale	new	products	more	rapidly.	We	believe	this	competitive	advantage	will	be	extended	in	the	future	as	the	costs	to	build	leading-edge fabrication	facilities	increase,	and	as	fewer	semiconductor	companies	will	be	able	to	combine	platform	design	and	manufacturing. •Architecture	and	Platforms.	We	are	developing	a	wide	range	of	solutions	for	devices	that	span	the	computing	continuum	and	allow	for	computing experiences	from	notebooks	(including	Ultrabook	devices	and	2	in	1	systems),	desktops,	tablets,	and	smartphones	to	in-vehicle	infotainment	systems and	beyond.	We	believe	that	users	want	consistent	computing	experiences	and	interoperable	devices	and	that	users	and	developers	value consistency	of	architecture.	This	provides	a	common	framework	that	results	in	shortened	time	to	market,	and	the	ability	to	leverage	technologies across	multiple	form	factors.	We	believe	that	we	can	meet	the	needs	of	users	and	developers	to	offer	computing	solutions	across	the	computing continuum	through	our	partnership	with	the	industry	on	open,	standards-based	platform	innovation	around	Intel®	architecture.	We	continue	to	invest	in improving	Intel	architecture	to	deliver	increased	value	to	our	customers	and	expand	the	capabilities	of	the	architecture	in	adjacent	market	segments. For	example,	we	focus	on	delivering	improved	energy-efficient	performance,	which	involves	balancing	higher	performance	with	lower	power consumption.	In	addition,	we	are	focusing	on	perceptual	computing,	which	brings	exciting	user	experiences	through	devices	that	sense	and	perceive the	user's	actions.

•Software	and	Services.	We	offer	software	and	services	that	provide	solutions	through	a	combination	of	hardware	and	software	for	consumer,	ultra- mobile,	and	corporate	environments.	Additionally,	we	seek	to	enable	and	advance	the	computing	ecosystem	by	providing	development	tools	and support	to	help	software	developers	create	software	applications	and	operating	systems	that	take	advantage	of	our	platforms.	We	seek	to	expedite growth	in	various	market	segments,	such	as	the	embedded	market	segment,	through	our	software	offerings.	We	continue	to	collaborate	with companies	to	develop	software	platforms	optimized	for	our	Intel	processors	and	that	support	multiple	hardware	architectures	and	operating	systems. •Security.	Through	our	expertise	in	hardware	and	software,	we	are	able	to	embed	security	into	many	facets	of	computing.	We	expect	to	bring	unique hardware,	software,	and	end-to-end	security	solutions	to	the	market	in	order	to	offer	increased	protection	against	security	risks	for	consumers	and businesses	worldwide.

•Customer	Orientation.	Our	strategy	focuses	on	developing	our	next	generation	of	products	based	on	the	needs	and	expectations	of	our	customers.	In turn,	our	products	help	enable	the	design	and	development	of	new	user	experiences,	form	factors,	and	usage	models	for	businesses	and	consumers. We	offer	platforms	that	incorporate	various	components	and	capabilities	designed	and	configured	to	work	together	to	provide	an	optimized	solution that	customers	can	easily	integrate	into	their	end	products.	Additionally,	we	promote	industry	standards	that	we	believe	will	yield	innovation	and improved	technologies	for	users.

•Strategic	Investments.	We	make	investments	in	companies	around	the	world	that	we	believe	will	further	our	strategic	objectives,	support	our	key business	initiatives,	and	generate	financial	returns.	Our	investments—including	those	made	through	our	Intel	Capital	program—generally	focus	on investing	in	companies	and	initiatives	that	we	believe	will	stimulate	growth	in	the	digital	economy,	create	new	business	opportunities	for	Intel,	and expand	global	markets	for	our	products.	Additionally,	we	plan	to	continue	to	purchase	and	license	intellectual	property	to	support	our	current	and expanding	business.

•Corporate	Stewardship.	We	are	committed	to	developing	energy-efficient	technology	solutions	that	can	be	used	to	address	major	global	problems while	reducing	our	environmental	impact.	We	are	also	committed	to	empowering	people	and	expanding	economic	opportunity	through	education	and technology,	driven	by	our	corporate	and	Intel	Foundation	programs,	policy	leadership,	and	collaborative	engagements.	In	addition,	we	strive	to cultivate	a	work	environment	in	which	engaged,	energized	employees	can	thrive	in	their	jobs	and	in	their	communities.

Our	continued	investment	in	developing	our	assets	and	execution	in	key	focus	areas	is	intended	to	help	strengthen	our	competitive	position	as	we	enter and	expand	into	adjacent	market	segments,	such	as	smartphones	and	tablets.	These	market	segments	change	rapidly,	and	we	need	to	adapt	to	this environment.	A	key	characteristic	of	these	adjacent	market	segments	is	low-power	consumption	based	on	SoC	products.	We	are	making	significant investments	in	this	area	with	the	accelerated	development	of	our	SoC	solutions	based	on	the	64-bit	Intel®	Atom™	microarchitecture.	We	are	also optimizing	our	server	products	for	energy-efficient	performance	as	we	believe	that	increased	Internet	traffic	and	the	use	of	ultra-mobile	devices,	the Internet	of	Things,	and	cloud	computing	has	created	the	need	for	an	improved	server	infrastructure.

At	the	2013	Intel	Developer	Forum,	we	introduced	the	Intel ®	Quark	SoC	family	of	products.	Designed	for	applications	where	low	power	and	size	take priority	over	high	performance,	the	Intel	Quark	SoC	offers	extremely	low	power	consumption	and	a	high	level	of	integration	in	a	low-cost	package	to	be used	in	the	next	wave	of	intelligent	connected	devices.	In	addition,	we	also	announced	the	Arduino*-compatible	Intel®	Galileo	microcontroller	board	and the	Intel®	Edison	development	board	at	the	Maker	Faire*	in	Rome	and	the	International	Consumer	Electronics	Show,	respectively.	When	combined	with Intel	Quark	SoC,	these	systems	provide	an	open-source	platform	for	customers	to	design	products	such	as,	but	not	limited	to,	automation	for	home appliances	or	industrial	manufacturing,	home	media	centers,	and	robots.	In	combination	with	the	continued	build	out	of	the	cloud	and	the	announcement of	the	Intel	Quark	technologies,	we	expect	to	be	on	the	forefront	of	the	acceleration	and	proliferation	of	the	Internet	of	Things.

# Business	Organization

As	of	December	28,	2013,	we	managed	our	business	through	the	following	operating	segments:

For	a	description	of	our	operating	segments,	see	" Note	27:	Operating	Segments	and	Geographic	Information,"	in	Part	II,	Item	8	of	this	Form	10-K.

# Products

# Platforms

We	offer	platforms	that	incorporate	various	components	and	technologies,	including	a	microprocessor	and	chipset,	a	stand-alone	SoC,	or	multichip package.	Additionally,	a	platform	may	be	enhanced	by	additional	hardware,	software,	and	services.

A	microprocessor—the	central	processing	unit	(CPU)	of	a	computer	system—processes	system	data	and	controls	other	devices	in	the	system.	We	offer microprocessors	with	one	or	multiple	processor	cores.	Multi-core	microprocessors	can	enable	improved	multitasking	and	energy-efficient	performance	by distributing	computing	tasks	across	two	or	more	cores.	Our	2nd,	3rd,	4th,	and	expected-to-be-released	5th	generation	Intel®	Core™	(code-named "Broadwell")	processor	families	integrate	graphics	functionality	onto	the	processor	die.	In	contrast,	some	of	our	previous-generation	processors incorporated	a	separate	graphics	chip	inside	the	processor	package.	Processor	packages	may	also	integrate	a	memory	controller.

A	chipset	sends	data	between	the	microprocessor	and	input,	display,	and	storage	devices,	such	as	the	keyboard,	mouse,	monitor,	hard	drive	or	solid- state	drive,	and	optical	disc	drives.	Chipsets	extend	the	audio,	video,	and	other	capabilities	of	many	systems	and	perform	essential	logic	functions,	such	as balancing	the	performance	of	the	system	and	removing	bottlenecks.

We	offer	and	continue	to	develop	SoC	products	that	integrate	our	core	processing	functions	with	other	system	components,	such	as	graphics,	audio,	and video,	onto	a	single	chip.	SoC	products	are	designed	to	reduce	total	cost	of	ownership,	provide	improved	performance	due	to	higher	integration	and	lower power	consumption,	and	enable	ultra-mobile	form	factors	such	as	smartphones,	tablets,	Ultrabook	devices,	and	2	in	1	systems,	as	well	as	notebooks, desktops,	embedded	systems	and	microserver	applications.

With	the	release	of	our	4th	generation	Intel	Core 	processor	in	2013,	we	introduced	a	multichip	package	that	integrates	the	chipset	on	one	die	with	the	CPU and	graphics	on	another	die,	connected	via	a	lower	power	on-package	interface.	Similar	to	a	SoC,	the	multichip	package	can	provide	improved performance	due	to	higher	integration	coupled	with	lower	power	consumption,	which	enables	smaller	form	factors.

We	also	offer	features	designed	to	improve	our	platform	capabilities.	For	example,	Intel ®	vPro™	technology	is	a	computer	hardware-based	security technology	for	the	notebook	and	desktop	market	segments.	Intel	vPro	is	designed	to	provide	businesses	with	increased	manageability,	upgradeability, energy-efficient	performance,	and	security	while	lowering	the	total	cost	of	ownership.	We	also	offer	Intel®	Iris™	technology,	which	provides	graphics enhancements	for	4th	and	expected-to-be-released	5th	generation	Intel	Core	processors.

We	offer	a	range	of	platforms	based	upon	the	following	microprocessors:

# McAfee,	Inc.

McAfee,	Inc.	(McAfee)	has	the	objective	of	improving	the	overall	security	of	our	platforms.	McAfee	offers	software	products	that	provide	security	solutions designed	to	protect	systems	in	consumer,	mobile,	and	corporate	environments	from	malicious	virus	attacks	as	well	as	loss	of	data.	McAfee's	products include	software	solutions	for	end-point	security,	network	and	content	security,	risk	and	compliance,	and	consumer	and	mobile	security.

# Phone	and	Tablet	Components

We	offer	components	for	smartphones,	tablets,	and	connected	devices	which	include	baseband	processors,	radio	frequency	transceivers,	and	power management	integrated	circuits.	We	also	offer	comprehensive	smartphone	and	tablet	platforms,	including	multimode	Long	Term	Evolution	(LTE*) modems,	Bluetooth®	wireless	technology	and	Global	Positioning	System	(GPS)	receivers,	software	solutions,	customization,	and	essential	interoperability tests.	Our	mobile	phone	solutions,	which	are	based	on	multiple	industry	standards,	help	enable	mobile	voice	and	high-speed	data	communications	for	a broad	range	of	devices	around	the	world.

# Non-Volatile	Memory	Solutions

We	offer	NAND	flash	memory	products	primarily	used	in	solid-state	drives.	Our	NAND	flash	memory	products	are	manufactured	by	IM	Flash Technologies,	LLC	(IMFT).	We	also	purchase	NAND	flash	components	from	Micron	Technology,	Inc.	(Micron).

# Intel	Custom	Foundry

We	offer	our	silicon	and	manufacturing	technology	leadership	as	a	service	for	our	customers.	Our	foundry	offerings	include	semi-custom	services	(using Intel	architecture	and	silicon	with	our	customer's	intellectual	property)	and	fully	custom	foundry	services.

# Products	and	Product	Strategy	by	Operating	Segment

Our	PC	Client	Group	operating	segment	offers	products	that	are	incorporated	in	notebook	(including	Ultrabook	devices	and	2	in	1	systems)	and	desktop computers	for	consumers	and	businesses.	In	2013,	we	introduced	the	4th	generation	Intel	Core	processor	family	for	use	in	notebooks,	desktops,	2	in	1 systems,	and	tablets.	These	processors	use	22-nanometer	(nm)	transistors	and	our	Tri-Gate	transistor	processor	technology.	Our	Tri-Gate	transistor technology	extends	Moore's	Law	and	is	the	world's	first	3-D	Tri-Gate	transistor	on	a	production	technology.	In	combination,	these	enhancements	can provide	significant	power	savings	and	performance	gains	when	compared	to	previous-generation	technologies.

# Notebook

Our	strategy	for	the	notebook	computing	market	segment	is	to	offer	notebook	technologies	designed	to	bring	exciting	new	user	experiences	to	life	and improve	performance,	battery	life,	wireless	connectivity,	manageability	and	security.	In	addition,	we	are	designing	for	smaller,	lighter,	and	thinner	form factors.	In	the	second	half	of	2014,	we	expect	to	introduce	our	5th	generation	Intel	Core	processor	family.	We	believe	these	processors	will	continue	to deliver	increasing	levels	of	battery	life	and	graphics	performance,	as	well	as	provide	OEMs	and	end	users	with	more	choice	in	operating	system compatibility,	energy	efficiency,	processor	cores,	and	graphics	performance.

In	addition	to	offering	notebooks,	we	have	worked	with	our	customers	to	help	them	develop	a	new	class	of	personal	computing	devices	that	includes Ultrabook	devices	and	2	in	1	systems.	These	computers	combine	the	energy-efficient	performance	and	capabilities	of	today's	notebooks	and	tablets	with enhanced	graphics	and	improved	user	interfaces	such	as	touch	and	voice	in	a	thin,	light	form	factor	that	is	highly	responsive	and	secure,	and	that	can seamlessly	connect	to	the	Internet.	We	believe	the	renewed	innovation	in	the	PC	industry	that	we	fostered	with	Ultrabook	devices	and	expanded	to	2	in	1 systems	will	continue.

# Desktop

Our	strategy	for	the	desktop	computing	market	segment	is	to	offer	exciting	new	user	experiences	and	products	that	provide	increased	manageability, security,	and	energy-efficient	performance.	We	are	also	focused	on	lowering	the	total	cost	of	ownership	for	businesses.	The	desktop	computing	market segment	includes	all-in-one	desktop	products,	which	combine	traditionally	separate	desktop	components	into	one	form	factor.	Additionally,	all-in-one computers	have	transformed	into	portable	and	flexible	form	factors	that	offer	users	increased	portability	and	new	multi-user	applications	and	uses.	For desktop	consumers,	we	also	focus	on	the	design	of	products	for	high-end	enthusiast	PCs	and	mainstream	PCs	with	rapidly	increasing	audio	and	media capabilities.

Our	Data	Center	Group	operating	segment	offers	products	designed	to	provide	leading	energy-efficient	performance	for	all	compute,	network	and storage	platforms.	In	addition,	the	Data	Center	Group	(DCG)	focuses	on	specific	optimizations	for	the	Enterprise,	Cloud,	Communications	Infrastructure and	Technical	Computing	segments.	DCG	is	continuing	to	ramp	the	many-core	Intel®	Xeon	Phi™	coprocessor	with	60	or	more	high-performance,	low- power	Intel	processor	cores.	The	Intel	Xeon	Phi	coprocessors	are	positioned	to	boost	the	power	of	the	world's	most	advanced	supercomputers,	allowing for	trillions	of	calculations	per	second.	We	recently	introduced	new	Intel®	Xeon®

processors	incorporating	Intel's	industry	leading	22nm	process	technology.	The	22nm	Intel	Xeon	processors	provide	improved	performance	and	better power	consumption	across	the	compute,	network	and	storage	portfolio.	We	also	announced	the	second	generation	64-bit	Intel	Atom	microarchitecture- based	SoC	solutions	to	focus	on	storage,	networking	and	highly	dense,	low-power	server	configurations.

Our	other	Intel	architecture	operating	segments	offer	products	designed	to	be	used	in	the	Internet	of	Things,	mobile	communications,	tablet, smartphone,	service	provider,	netbook,	and	ultra-low	power	market	segments.

•Our	strategy	for	the	mobile	communications	market	segment	is	to	offer	a	portfolio	of	products	that	covers	a	broad	range	of	wireless	connectivity options	by	combining	Intel	WiFi	technology	with	our	2G,	3G,	and	4G	LTE	technologies.	These	products	feature	low	power	consumption,	innovative designs,	and	multi-standard	platform	solutions.

•Our	strategy	for	the	embedded	market	segment,	addressed	by	our	Intelligent	Systems	Group	(ISG),	is	to	lead	the	Internet	of	Things	evolution	by delivering	new	user	experiences,	business	efficiencies,	and	productivity	utilizing	Intel	architecture	based	solutions	that	provide	long	life-cycle	support, software	and	architectural	scalability,	and	platform	integration.

•Our	strategy	for	the	tablet	market	segment	is	to	offer	Intel	architecture	solutions	optimized	for	multiple	operating	systems	and	application	ecosystems. We	are	accelerating	the	process	technology	development	for	our	Intel	Atom	processor	product	line	to	deliver	increased	battery	life,	performance,	and feature	integration.

•Our	strategy	for	the	smartphone	device	market	segment	is	to	offer	Intel	Atom	microarchitecture-based	products	that	enable	smartphones	to	deliver innovative	content	and	services.	These	products	are	designed	to	deliver	increased	performance	and	system	responsiveness	while	also	enabling longer	battery	life.

•Our	strategy	for	the	ultra-low	power	market	segment	is	to	offer	Intel	Quark	SoCs	designed	for	wearable	and	other	emerging	compute	devices.

Our	software	and	services	operating	segments	seek	to	create	differentiated	user	experiences	on	Intel-based	platforms.	We	differentiate	by	combining Intel	platform	features	and	enhanced	software	and	services.	Our	three	primary	initiatives	are:

•enabling	platforms	that	can	be	used	across	multiple	operating	systems,	applications,	and	services	across	all	Intel	products; •optimizing	features	and	performance	by	enabling	the	software	ecosystem	to	quickly	take	advantage	of	new	platform	features	and	capabilities;	and •delivering	comprehensive	solutions	by	using	software,	services,	and	hardware	to	enable	a	more	secure	online	experience,	such	as	our	McAfee LiveSAFE*	technology	platform,	which	provides	a	comprehensive	security	suite	that	offers	consumer	protection	across	a	range	of	devices	such	as PCs,	tablets,	and	smartphones.

# Revenue	by	Major	Operating	Segment

Net	revenue	for	the	PC	Client	Group	(PCCG)	operating	segment,	the	DCG	operating	segment,	the	other	Intel	architecture	(Other	IA)	operating	segments, and	the	software	and	services	(SSG)	operating	segments	is	presented	as	a	percentage	of	our	consolidated	net	revenue.	Other	IA	includes	ISG,	Multi- Comm,	the	Phone	Group,	the	Service	Provider	Group,	the	Tablet	Group,	the	Netbook	Group,	and	the	New	Devices	Group	operating	segments.	SSG includes	McAfee,	the	Wind	River	Software	Group,	and	the	Software	and	Services	Group	operating	segments.	All	other	consists	primarily	of	revenue	from the	Non-Volatile	Memory	Solutions	Group.

# Percentage	of	Revenue	by	Major	Operating	Segment

(Dollars	in	Millions)

# Percentage	of	Revenue	by	Principal	Product	from	Reportable	Segments

# Competition

The	computing	industry	continuously	evolves	with	new	and	enhanced	technologies	and	products	from	existing	and	new	providers.	The	markets	for	current and	planned	technologies	can	change	quickly	in	response	to	the	introduction	of	such	technologies	and	products	and	other	factors	such	as	changes	in consumer	tastes.

Intel	faces	significant	competition	in	the	development	and	market	acceptance	of	technologies	and	products	in	this	environment.	Our	platforms,	based	on Intel	architecture,	are	positioned	to	compete	across	the	spectrum	of	Internet-connected	computing	devices,	from	the	lowest-power	portable	devices	to	the most	powerful	data	center	servers.

We	are	a	leading	provider	in	the	PC	and	server	segments,	where	we	face	existing	and	emerging	competition.	In	the	PC	segment,	smaller	mobile	devices, such	as	tablets	and	smartphones,	offered	by	numerous	vendors	have	become	significant	competitors	to	PCs	for	many	usages.	Most	of	these	small devices	currently	use	applications	processors	based	on	the	ARM*	architecture;	feature	low-power,	long	battery-life	operation;	and	are	built	in	SoC	formats which	integrate	numerous	functions	on	one	chip.	In	the	server	segment,	our	data	center	products	and	platforms	face	emerging	competition	from	many	new entrants	using	ARM	architecture	or	other	technologies.

We	are	a	relatively	new	entrant	to	the	segments	for	tablets,	smartphones	and	similar	mobile	devices.	We	have	adjusted	our	product	roadmaps	to emphasize	the	development	of	low-power	SoC	chips	for	these	and	other	devices.	The	boundaries	between	the	various	segments	are	changing	as	the industry	evolves	and	new	segments	emerge.

We	have	a	long-standing	position	as	a	supplier	of	components	and	software	for	embedded	products	and	this	marketplace	is	significantly	expanding	with increasing	types	and	numbers	of	Internet-connected	devices	for	industrial,	commercial	and	consumer	uses,	which	we	refer	to	as	the	Internet	of	Things. We	face	numerous	large	and	small	incumbent	competitors	as	well	as	new	entrants	in	this	growing	market	segment	that	use	ARM	architecture	as	well	as other	operating	systems	and	software.

Our	products	primarily	compete	based	on	performance,	energy	efficiency,	integration,	innovative	design,	features,	price,	quality,	reliability,	brand recognition	and	availability.	The	importance	of	these	items	will	vary	by	the	type	of	end	system	for	the	products.	For	example,	performance	might	be	among the	most	important	factors	for	our	products	for	servers,	while	price	and	integration	might	be	among	the	most	important	factors	for	our	products	for	tablets and	smartphones.

We	are	the	owner	of	McAfee,	a	major	provider	of	digital	security	products	and	services	to	businesses	and	consumers.	There	are	numerous	competitors offering	security	products	and	services,	and	we	seek	to	offer	competitive	differentiation	by	integrating	hardware	and	software	security	features	in	many	of our	offerings	and	to	have	security	offerings	in	numerous	market	segments	including	mobile	and	embedded	devices	and	for	data	centers.

The	ability	of	our	products	to	operate	on	multiple	operating	systems	in	end-user	products	and	platforms	operated	or	sold	by	third	parties,	including	OEMs, is	a	key	competitive	advantage.	We	seek	to	optimize	our	products	for	multiple	operating	systems	and	invest	substantial	resources	working	with	third parties	to	do	so,	but	such	investments	are	risky	given	that	it	is	not	clear	which	products	will	succeed	in	the	market.

We	have	competitors	in	each	of	the	market	segments	including	other	companies	that	make	and	sell	microprocessors,	SoCs,	other	silicon	components, software	and	platforms	to	businesses	which	build	and	sell	computing	and	communications	devices	to	end-users.	We	also	compete	against	others	selling these	goods	and	services	to	businesses	that	utilize	the	products	for	their	internal	processes	(e.g.,	businesses	running	large	data	centers).	We	also	face competition	from	OEMs	that,	to	some	degree,	choose	to	vertically	integrate	their	own	proprietary	semiconductor	and	software	assets.	By	doing	so,	these OEMs	may	be	attempting	to	offer	greater	differentiation	in	their	products	and	to	increase	their	share	of	the	profits	for	each	finished	product	they	sell. Continuing	changes	in	the	industry	such	as	acquisitions,	business	collaborations	or	licensing	scenarios	(such	as	injunctions	or	other	litigation	outcomes), could	have	a	significant	impact	on	our	competitive	position.

One	of	our	important	competitive	advantages	is	the	combination	of	our	network	of	manufacturing,	assembly	and	test	facilities	with	our	global	architecture design	teams.	We	have	made	significant	capital	and	research	and	development	(R&D)	investments	into	this	integrated	manufacturing	network,	which enables	us	to	have	more	direct	control	over	our	processes,	quality	control,	product	cost,	production	timing,	performance,	power	consumption,	and manufacturing	yield.	The	increased	cost	of	constructing	new	fabrication	facilities	supporting	smaller	transistor	geometries	and	larger	wafers	has	led	to	a smaller	pool	of	companies	that	can	afford	to	build	and	equip	leading-edge	manufacturing	facilities.	Most	of	our	competitors	rely	on	third-party	foundries	and subcontractors	such	as	Taiwan	Semiconductor	Manufacturing	Company,	Ltd.	and	GlobalFoundries	Inc.	for	manufacturing	and	assembly	and	test needs.	We	have	recently	started	providing	foundry	services	as	an	alternative	to	such	foundries.

# Manufacturing	and	Assembly	and	Test

As	of	December	28,	2013,	46%	of	our	wafer	fabrication,	including	microprocessors	and	chipsets,	was	conducted	within	the	U.S.	at	our	facilities	in	New Mexico,	Arizona,	Oregon,	and	Massachusetts.	The	remaining	54%	of	our	wafer	fabrication	was	conducted	outside	the	U.S.	at	our	facilities	in	Israel	and China.	Our	fabrication	facility	in	Ireland	is	currently	transitioning	to	a	newer	process	technology	node,	with	manufacturing	expected	to	recommence	in 2015.	Wafer	fabrication	conducted	within	and	outside	the	U.S.	may	be	impacted	by	the	timing	of	a	facility's	transition	to	a	newer	process	technology,	as well	as	a	facility's	capacity	utilization.

As	of	December	28,	2013,	we	primarily	manufactured	our	products	in	wafer	fabrication	facilities	at	the	following	locations:

| Products | Wafer	Size | Process	Technology | Locations |
| :--- | :--- | :--- | :--- |
| Microprocessors | 300mm | 22nm | Israel,\tArizona,\tOregon |
| Microprocessors\tand\tchipsets | 300mm | 32nm | \t New\tMexico |
| Microprocessors | 300mm | 45nm | \t New\tMexico |
| Chipsets | 300mm | 65nm | \t China |
| Chipsets\tand\tother\tproducts | 300mm | 90nm | \t China |
| Chipsets | 200mm | 130nm | \t Massachusetts |

As	of	December	28,	2013,	most	of	our	microprocessors	were	manufactured	on	300mm	wafers	using	our	22nm	and	32nm	process	technology.	Our Massachusetts	fabrication	facility	is	our	last	manufacturing	on	200mm	wafers	and	is	expected	to	cease	production	by	the	end	of	2014.	As	we	move	to each	succeeding	generation	of	manufacturing	process	technology,	we	incur	significant	start-up	costs	to	prepare	each	factory	for	manufacturing.	However, continuing	to	advance	our	process	technology	provides	benefits	that	we	believe	justify	these	costs.	The	benefits	of	moving	to	each	succeeding	generation of	manufacturing	process	technology	can	include	using	less	space	per	transistor,	reducing	heat	output	from	each	transistor,	and	increasing	the	number	of integrated	features	on	each	chip.	These	advancements	can	result	in	microprocessors	that	are	higher	performing,	consume	less	power,	and	cost	less	to manufacture.	In	addition,	with	each	shift	to	a	new	process	technology,	we	are	able	to	produce	more	microprocessors	per	square	foot	of	our	wafer fabrication	facilities.	The	costs	to	develop	our	process	technology	are	significantly	less	than	adding	capacity	by	building	additional	wafer	fabrication facilities	using	older	process	technology.

We	use	third-party	foundries	to	manufacture	wafers	for	certain	components,	including	networking	and	communications	products.	In	addition,	we	primarily use	subcontractors	to	manufacture	board-level	products	and	systems.	We	purchase	certain	communications	networking	products	and	mobile	phone components	from	external	vendors	primarily	in	the	Asia-Pacific	region.

Following	the	manufacturing	process,	the	majority	of	our	components	are	subject	to	assembly	and	test.	We	perform	our	components	assembly	and	test	at facilities	in	Malaysia,	China,	Costa	Rica,	and	Vietnam .	To	augment	capacity,	we	use	subcontractors	to	perform	assembly	of	certain	products,	primarily chipsets	and	networking	and	communications	products.	In	addition,	we	use	subcontractors	to	perform	assembly	and	test	of	our	mobile	phone	components.

Our	NAND	flash	memory	products	are	manufactured	by	IMFT	and	Micron	using	20nm,	25nm,	or	34nm	process	technology,	and	assembly	and	test	of these	products	is	performed	by	Micron	and	other	external	subcontractors.	For	further	information,	see	"Note	5:	Cash	and	Investments"	in	Part	II,	Item	8	of this	Form	10-K.

Our	employment	practices	are	consistent	with,	and	we	expect	our	suppliers	and	subcontractors	to	abide	by,	local	country	law.	In	addition,	we	impose	a minimum	employee	age	requirement	as	well	as	progressive	Environmental,	Health,	and	Safety	(EHS)	requirements,	regardless	of	local	law.

We	have	thousands	of	suppliers,	including	subcontractors,	providing	our	various	materials	and	service	needs.	We	set	expectations	for	supplier performance	and	reinforce	those	expectations	with	periodic	assessments.	We	communicate	those	expectations	to	our	suppliers	regularly	and	work	with them	to	implement	improvements	when	necessary.	Where	possible,	we	seek	to	have	several	sources	of	supply	for	all	of	these	materials	and	resources, but	we	may	rely	on	a	single	or	limited	number	of	suppliers,	or	upon	suppliers	in	a	single	country.	In	those	cases,	we	develop	and	implement	plans	and actions	to	reduce	the	exposure	that	would	result	from	a	disruption	in	supply.	We	have	entered	into	long-term	contracts	with	certain	suppliers	to	ensure	a portion	of	our	silicon	supply.

Our	products	are	typically	manufactured	at	multiple	Intel	facilities	around	the	world	or	by	subcontractors.	However,	some	products	are	manufactured	in only	one	Intel	or	subcontractor	facility,	and	we	seek	to	implement	action	plans	to	reduce	the	exposure	that	would	result	from	a	disruption	at	any	such facility.	See	"Risk	Factors"	in	Part	I,	Item	1A	of	this	Form	10-K.

# Research	and	Development

We	are	committed	to	investing	in	world-class	technology	development,	particularly	in	the	design	and	manufacture	of	integrated	circuits.	R&D	expenditures were	$10.6	billion	in	2013	($10.1	billion	in	2012	and	$8.4	billion	in	2011).

Our	R&D	activities	are	directed	toward	the	delivery	of	solutions	consisting	of	hardware	and	software	platforms	and	supporting	services	across	a	wide range	of	computing	devices.	We	are	focused	on	developing	the	technology	innovations	that	we	believe	will	deliver	our	next	generation	of	products,	which will	in	turn	enable	new	form	factors	and	usage	models	for	businesses	and	consumers.	We	focus	our	R&D	efforts	on	advanced	computing	technologies, developing	new	microarchitectures,	advancing	our	silicon	manufacturing	process	technology,	delivering	the	next	generation	of	platforms,	improving	our platform	initiatives,	developing	new	solutions	in	emerging	technologies	including	wearable	devices	and	embedded	applications,	and	developing	software solutions	and	tools.	Our	R&D	efforts	are	intended	to	enable	new	levels	of	performance	and	address	areas	such	as	energy	efficiency,	security,	scalability for	multi-core	architectures,	system	manageability,	and	ease	of	use.

As	part	of	our	R&D	efforts,	we	plan	to	introduce	a	new	Intel	Core	microarchitecture	for	desktops,	notebooks	(including	Ultrabook	devices	and	2	in	1 systems),	and	Intel	Xeon	processors	approximately	every	two	years	and	ramp	the	next	generation	of	silicon	process	technology	in	the	intervening	years. We	refer	to	this	as	our	"tick-tock"	technology	development	cadence	as	subsequently	illustrated.

Advances	in	our	silicon	technology	have	enabled	us	to	continue	making	Moore's	Law	a	reality.	We	expect	to	begin	manufacturing	products	using	our	14nm process	technology	in	Q1	2014.	We	are	currently	developing	our	5th	generation	Intel	Core	processor	family	(code-named	"Broadwell")	using	our	14nm process	technology,	expected	to	be	released	in	the	second	half	of	2014.	We	are	also	developing	10nm	manufacturing	process	technology,	our	next- generation	process	technology.

We	have	continued	expanding	on	the	advances	anticipated	by	Moore's	Law	by	bringing	new	capabilities	into	silicon	and	producing	new	products	optimized for	a	wider	variety	of	applications.	We	have	accelerated	the	Intel	Atom	processor-based	SoC	roadmap	for	ultra-mobile	form	factors,	including smartphones	and	tablets,	as	well	as	notebooks	(including	Ultrabook	devices	and	2	in	1	systems),	embedded	systems,	and	microserver	applications,	from 32nm	through	22nm	to	14nm.	We	intend	that	Intel	Atom	processors	for	ultra-mobile	form	factors	will	eventually	be	on	the	same	process	technology	as	our leading-edge	products.	We	expect	that	this	acceleration	will	result	in	a	significant	reduction	in	transistor	leakage,	lower	active	power,	and	an	increase	in transistor	density	to	enable	more	powerful,	feature-rich	smartphones	and	tablets	with	longer	battery	life.	Intel	Quark	SoC,	our	newest	technology announced	in	Q3	2013,	is	an	ultra-low	power	and	low-cost	architecture	designed	for	the	Internet	of	Things,	from	industrial	machines	to	wearable	devices.

With	our	continued	focus	on	silicon	and	manufacturing	technology	leadership,	we	entered	into	a	series	of	agreements	with	ASML	Holding	N.V.	(ASML)	in 2012.	These	agreements,	in	which	Intel	purchased	ASML	securities	and	agreed	to	provide	R&D	funding	over	five	years,	are	intended	to	accelerate	the development	of	450mm	wafer	technology	and	EUV	lithography.

Our	R&D	activities	range	from	designing	and	developing	new	products	and	manufacturing	processes	to	researching	future	technologies	and	products.	We continue	to	make	significant	R&D	investments	in	the	development	of	SoCs	to	enable	growth	in	ultra-mobile	form	factors.	In	addition,	we	continue	to	make significant	investments	in	wireless	technologies	including	our	work	to	develop	a	high-speed	LTE	solution	for	smartphones.	Our	second	generation	VoLTE product	with	LTE-advanced	features,	such	as	carrier	aggregation,	is	expected	to	be	available	in	the	first	half	of	2014.	We	also	continue	to	invest	in graphics	and	HPC.

Our	R&D	model	is	based	on	a	global	organization	that	emphasizes	a	collaborative	approach	to	identifying	and	developing	new	technologies,	leading standards	initiatives,	and	influencing	regulatory	policies	to	accelerate	the	adoption	of	new	technologies,	including	joint	pathfinding	conducted	between researchers	at	Intel	Labs	and	our	business	groups.	We	centrally	manage	key	cross-business	group	product	initiatives	to	align	and	prioritize	our	R&D activities	across	these	groups.	In	addition,	we	may	augment	our	R&D	activities	by	investing	in	companies	or	entering	into	agreements	with	companies	that have	similar	R&D	focus	areas,	as	well	as	directly	purchasing	or	licensing	technology	applicable	to	our	R&D	initiatives.

# Employees

# Sales	and	Marketing

# Customers

We	sell	our	products	primarily	to	OEMs	and	ODMs.	ODMs	provide	design	and	manufacturing	services	to	branded	and	unbranded	private-label	resellers.	In addition,	we	sell	our	products	to	other	manufacturers,	including	makers	of	a	wide	range	of	industrial	and	communications	equipment.	Our	customers	also include	those	who	buy	PC	components	and	our	other	products	through	distributor,	reseller,	retail,	and	OEM	channels	throughout	the	world.

Our	worldwide	reseller	sales	channel	consists	of	thousands	of	indirect	customers—systems	builders	that	purchase	Intel	microprocessors	and	other products	from	our	distributors.	We	have	a	boxed	processor	program	that	allows	distributors	to	sell	our	microprocessors	in	small	quantities	to	customers	of systems	builders;	boxed	processors	are	also	available	in	direct	retail	outlets.

In	2013,	Hewlett-Packard	Company	accounted	for	 17%	of	our	net	revenue	(18%	in	2012	and	19%	in	2011),	Dell	Inc.	accounted	for	15%	of	our	net revenue	(14%	in	2012	and	15%	in	2011),	and	Lenovo	Group	Limited	accounted	for	 12%	of	our	net	revenue	(11%	in	2012	and	9%	in	2011).	No	other customer	accounted	for	more	than	10%	of	our	net	revenue	during	such	periods.	For	information	about	net	revenue	and	operating	income	by	operating segment,	and	net	revenue	from	unaffiliated	customers	by	country,	see	"Note	27:	Operating	Segments	and	Geographic	Information"	in	Part	II,	Item	8	of	this Form	10-K.

# Sales	Arrangements

Our	products	are	sold	through	sales	offices	throughout	the	world.	Sales	of	our	products	are	typically	made	via	purchase	order	acknowledgments	that contain	standard	terms	and	conditions	covering	matters	such	as	pricing,	payment	terms,	and	warranties,	as	well	as	indemnities	for	issues	specific	to	our products,	such	as	patent	and	copyright	indemnities.	From	time	to	time,	we	may	enter	into	additional	agreements	with	customers	covering,	for	example, changes	from	our	standard	terms	and	conditions,	new	product	development	and	marketing,	private-label	branding,	and	other	matters.	Most	of	our	sales are	made	using	electronic	and	web-based	processes	that	allow	the	customer	to	review	inventory	availability	and	track	the	progress	of	specific	goods ordered.	Pricing	on	particular	products	may	vary	based	on	volumes	ordered	and	other	factors.	We	also	offer	discounts,	rebates,	and	other	incentives	to customers	to	increase	acceptance	of	our	products	and	technology.

Our	products	are	typically	shipped	under	terms	that	transfer	title	to	the	customer,	even	in	arrangements	for	which	the	recognition	of	revenue	and	related cost	of	sales	is	deferred.	Our	standard	terms	and	conditions	of	sale	typically	provide	that	payment	is	due	at	a	later	date,	generally	30	days	after	shipment or	delivery.	Our	credit	department	sets	accounts	receivable	and	shipping	limits	for	individual	customers	to	control	credit	risk	to	Intel	arising	from outstanding	account	balances.	We	assess	credit	risk	through	quantitative	and	qualitative	analysis,	and	from	this	analysis,	we	establish	credit	limits	and determine	whether	we	will	use	one	or	more	credit	support	devices,	such	as	a	parent	guarantee	or	standby	letter	of	credit,	or	credit	insurance.	Credit	losses may	still	be	incurred	due	to	bankruptcy,	fraud,	or	other	failure	of	the	customer	to	pay.	For	information	about	our	allowance	for	doubtful	receivables,	see "Schedule	II—Valuation	and	Qualifying	Accounts"	in	Part	IV	of	this	Form	10-K.

Most	of	our	sales	to	distributors	are	made	under	agreements	allowing	for	price	protection	on	unsold	merchandise	and	a	right	of	return	on	stipulated quantities	of	unsold	merchandise.	Under	the	price	protection	program,	we	give	distributors	credits	for	the	difference	between	the	original	price	paid	and the	current	price	that	we	offer.	On	most	products,	there	is	no	contractual	limit	on	the	amount	of	price	protection,	nor	is	there	a	limit	on	the	time	horizon under	which	price	protection	is	granted.	The	right	of	return	granted	generally	consists	of	a	stock	rotation	program	in	which	distributors	are	able	to exchange	certain	products	based	on	the	number	of	qualified	purchases	made	by	the	distributor.	We	have	the	option	to	grant	credit	for,	repair,	or	replace defective	products,	and	there	is	no	contractual	limit	on	the	amount	of	credit	that	may	be	granted	to	a	distributor	for	defective	products.

# Distribution

Distributors	typically	handle	a	wide	variety	of	products,	including	those	that	compete	with	our	products,	and	fill	orders	for	many	customers.	We	also	utilize third-party	sales	representatives	who	generally	do	not	offer	directly	competitive	products	but	may	carry	complementary	items	manufactured	by	others. Sales	representatives	do	not	maintain	a	product	inventory;	instead,	their	customers	place	orders	directly	with	us	or	through	distributors.	We	have	several distribution	warehouses	that	are	located	in	proximity	to	key	customers.

# Backlog

Over	time,	our	larger	customers	have	generally	moved	to	lean-inventory	or	just-in-time	operations	rather	than	maintaining	larger	inventories	of	our products.	As	our	customers	continue	to	lower	their	inventories,	our	processes	to	fulfill	their	orders	have	evolved	to	meet	their	needs.	As	a	result,	our manufacturing	production	is	based	on	estimates	and	advance	non-binding	commitments	from	customers	as	to	future	purchases.	Our	order	backlog	as	of any	particular	date	is	a	mix	of	these	commitments	and	specific	firm	orders	that	are	primarily	made	pursuant	to	standard	purchase	orders	for	delivery	of products.	Only	a	small	portion	of	our	orders	is	non-cancelable,	and	the	dollar	amount	associated	with	the	non-cancelable	portion	is	not	significant.

# Seasonal	Trends

Historically,	our	platform	sales	have	generally	been	higher	in	the	second	half	of	the	year	than	in	the	first	half	of	the	year,	accelerating	in	the	third	quarter and	peaking	in	the	fourth	quarter.

# Marketing

Our	corporate	marketing	objectives	are	to	build	a	strong,	well-known	Intel	corporate	brand	that	connects	with	businesses	and	consumers,	and	to	offer	a limited	number	of	meaningful	and	valuable	brands	in	our	portfolio	to	aid	businesses	and	consumers	in	making	informed	choices	about	technology purchases.	The	Intel	Core	processor	family	and	the	Intel	Atom,	Intel®	Pentium®,	Intel	Xeon,	Intel	Xeon	Phi	and	Intel ®	Itanium®	trademarks	make	up	our processor	brands.

We	promote	brand	awareness	and	generate	demand	through	our	own	direct	marketing	as	well	as	through	co-marketing	programs.	Our	direct	marketing activities	include	television,	print,	and	Internet	advertising,	as	well	as	press	relations	and	social	media,	consumer	and	trade	events,	and	industry	and consumer	communications.	We	market	to	consumer	and	business	audiences,	and	focus	on	building	awareness	and	generating	demand	for	new	form factors	such	as	Ultrabook	and	2	in	1	systems,	and	for	increased	performance,	improved	energy	efficiency,	and	other	capabilities	such	as	Internet connectivity	and	security.

Purchases	by	customers	often	allow	them	to	participate	in	cooperative	advertising	and	marketing	programs	such	as	the	Intel	Inside ®	Program.	This program	broadens	the	reach	of	our	brands	beyond	the	scope	of	our	own	direct	marketing.	Through	the	Intel	Inside	Program,	certain	customers	are licensed	to	place	Intel	logos	on	computing	devices	containing	our	microprocessors	and	processor	technologies,	and	to	use	our	brands	in	their	marketing activities.	The	program	includes	a	market	development	component	that	accrues	funds	based	on	purchases	and	partially	reimburses	the	OEMs	for marketing	activities	for	products	featuring	Intel	brands,	subject	to	the	OEMs	meeting	defined	criteria.	These	marketing	activities	primarily	include television,	print,	and	Internet	marketing.	We	have	also	entered	into	joint	marketing	arrangements	with	certain	customers.

# Intellectual	Property	Rights	and	Licensing

Intel	owns	significant	intellectual	property	(IP)	around	the	world	that	relates	to	our	products,	services,	research	and	development,	and	other	activities	and assets.	Our	IP	portfolio	includes	patents,	copyrights,	trade	secrets,	trademarks,	trade	dress	rights,	and	maskwork	rights.	We	actively	seek	to	protect	our global	IP	rights	and	to	deter	unauthorized	use	of	our	IP	and	other	assets.	Such	efforts	can	be	difficult,	however,	particularly	in	countries	that	provide	less protection	to	IP	rights	and	in	the	absence	of	harmonized	international	IP	standards.	See	"Risk	Factors"	in	Part	I,	Item	1A,	and	"Note	26:	Contingencies"	in Part	II,	Item	8	of	this	Form	10-K.

We	have	obtained	patents	in	the	U.S.	and	other	countries.	While	our	patents	are	an	important	element	of	our	success,	our	business	as	a	whole	is	not significantly	dependent	on	any	one	patent.	Because	of	the	fast	pace	of	innovation	and	product	development,	and	the	comparative	pace	of	governments' patenting	processes,	our	products	are	often	obsolete	before	the	patents	related	to	them	expire;	in	some	cases,	our	products	may	be	obsolete	before	the patents	related	to	them	are	granted.	As	we	expand	our	products	into	new	industries,	we	also	seek	to	extend	our	patent	development	efforts	to	patent	such products.	In	addition	to	developing	patents	based	on	our	own	research	and	development	efforts,	we	purchase	patents	from	third	parties	to	supplement	our patent	portfolio.	Established	competitors	in	existing	and	new	industries,	as	well	as	companies	that	purchase	and	enforce	patents	and	other	IP,	may	already have	patents	covering	similar	products.	There	is	no	assurance	that	we	will	be	able	to	obtain	patents	covering	our	own	products,	or	that	we	will	be	able	to obtain	licenses	from	other	companies	on	favorable	terms	or	at	all.

The	software	that	we	distribute,	including	software	embedded	in	our	component-level	and	platform	products,	is	entitled	to	copyright	and	other	IP protection.	To	distinguish	our	products	from	our	competitors'	products,	we	have	obtained	trademarks	and	trade	names	for	our	products,	and	we	maintain cooperative	advertising	programs	with	customers	to	promote	our	brands	and	to	identify	products	containing	genuine	Intel	components.	We	also	protect details	about	our	processes,	products,	and	strategies	as	trade	secrets,	keeping	confidential	the	information	that	we	believe	provides	us	with	a	competitive advantage.

# Compliance	with	Environmental,	Health,	and	Safety	Regulations

Our	compliance	efforts	focus	on	monitoring	regulatory	and	resource	trends	and	setting	company-wide	performance	targets	for	key	resources	and emissions.	These	targets	address	several	parameters,	including	product	design;	chemical,	energy,	and	water	use;	waste	recycling;	the	source	of	certain minerals	used	in	our	products;	climate	change;	and	emissions.

As	a	company,	we	focus	on	reducing	natural	resource	use,	the	solid	and	chemical	waste	by-products	of	our	manufacturing	processes,	and	the environmental	impact	of	our	products.	We	currently	use	a	variety	of	materials	in	our	manufacturing	process	that	have	the	potential	to	adversely	impact	the environment	and	are	subject	to	a	variety	of	EHS	laws	and	regulations.	Over	the	past	several	years,	we	have	significantly	reduced	the	use	of	lead	and halogenated	flame	retardants	in	our	products	and	manufacturing	processes.

We	work	with	the	U.S.	Environmental	Protection	Agency	(EPA),	non-governmental	organizations	(NGOs),	OEMs,	and	retailers	to	help	manage	e-waste (including	electronic	products	nearing	the	end	of	their	useful	lives)	and	to	promote	recycling.	The	European	Union	requires	producers	of	certain	electrical and	electronic	equipment	to	develop	programs	that	let	consumers	return	products	for	recycling.	Many	states	in	the	U.S.	have	similar	e-waste	take-back laws.	Although	these	laws	are	typically	targeted	at	the	end	electronic	product	and	not	the	component	products	that	we	manufacture,	the	inconsistency	of many	e-waste	take-back	laws	and	the	lack	of	local	e-waste	management	options	in	many	areas	pose	a	challenge	for	our	compliance	efforts.

We	are	an	industry	leader	in	our	efforts	to	build	ethical	sourcing	of	minerals	for	our	products,	including	"conflict	minerals"	from	the	Democratic	Republic	of the	Congo	(DRC)	and	adjoining	countries.	In	2013,	we	accomplished	our	goal	to	manufacture	microprocessors	that	are	DRC	conflict	free	for	tantalum,	tin, tungsten,	and	gold.	In	2014,	we	will	continue	our	work	to	establish	DRC	conflict	free	supply	chains	for	these	minerals	for	our	company	and	our	industry.

We	seek	to	reduce	our	global	greenhouse	gas	emissions	by	investing	in	energy	conservation	projects	in	our	factories	and	working	with	suppliers	to improve	energy	efficiency.	We	take	a	holistic	approach	to	power	management,	addressing	the	challenge	at	the	silicon,	package,	circuit,	micro-architecture, macro	architecture,	platform,	and	software	levels.	We	recognize	that	climate	change	may	cause	general	economic	risk.	For	further	information	on	the	risks of	climate	change,	see	"Risk	Factors"	in	Part	I,	Item	1A	of	this	Form	10-K.	We	see	a	potential	for	higher	energy	costs	driven	by	climate	change regulations.	This	could	include	items	applied	to	utility	companies	that	are	passed	along	to	customers,	such	as	carbon	taxes	or	costs	associated	with obtaining	permits	for	our	manufacturing	operations,	emission	cap	and	trade	programs,	or	renewable	portfolio	standards.

We	are	committed	to	sustainability	and	take	a	leadership	position	in	promoting	voluntary	environmental	initiatives	and	working	proactively	with governments,	environmental	groups,	and	industry	to	promote	global	environmental	sustainability.	We	believe	that	technology	will	be	fundamental	to	finding solutions	to	the	world's	environmental	challenges,	and	we	are	joining	forces	with	industry,	business,	and	governments	to	find	and	promote	ways	that technology	can	be	used	as	a	tool	to	combat	climate	change.

We	have	been	purchasing	wind	power	and	other	forms	of	renewable	energy	at	some	of	our	major	sites	for	several	years.	We	purchase	renewable	energy certificates	under	a	multi-year	contract.	This	purchase	has	placed	Intel	at	the	top	of	the	EPA's	Green	Power	Partnership	for	the	past	four	years	and	is intended	to	help	stimulate	the	market	for	green	power,	leading	to	additional	generating	capacity	and,	ultimately,	lower	costs.

# Distribution	of	Company	Information

Our	Internet	address	is	www.intel.com.	We	publish	voluntary	reports	on	our	web	site	that	outline	our	performance	with	respect	to	corporate	responsibility, including	EHS	compliance.

We	use	our	Investor	Relations	web	site,	 www.intc.com,	as	a	routine	channel	for	distribution	of	important	information,	including	news	releases,	analyst presentations,	and	financial	information.	We	post	filings	on	our	web	site	the	same	day	they	are	electronically	filed	with,	or	furnished	to,	the	U.S.	Securities and	Exchange	Commission	(SEC),	including	our	annual	and	quarterly	reports	on	Forms	10-K	and	10-Q	and	current	reports	on	Form	8-K;	our	proxy statements;	and	any	amendments	to	those	reports	or	statements.	We	post	our	quarterly	and	annual	earnings	results	on	our	Investor	Relations	website,	at www.intc.com/results.cfm,	and	do	not	distribute	our	financial	results	via	a	news	wire	service.	All	such	postings	and	filings	are	available	on	our	Investor Relations	web	site	free	of	charge.	In	addition,	our	Investor	Relations	web	site	allows	interested	persons	to	sign	up	to	automatically	receive	e-mail	alerts when	we	post	news	releases	and	financial	information.	The	SEC's	web	site,	www.sec.gov,	contains	reports,	proxy	and	information	statements,	and	other information	regarding	issuers	that	file	electronically	with	the	SEC.	The	content	on	any	web	site	referred	to	in	this	Form	10-K	is	not	incorporated	by reference	in	this	Form	10-K	unless	expressly	noted.

# Executive	Officers	of	the	Registrant

The	following	sets	forth	certain	information	with	regard	to	our	executive	officers	as	of February	14,	2014	(ages	are	as	of	December	28,	2013):

•	2002	–	2005, VP,	Developer	Programs •	Member	of	Vodafone	Group	plc	Board	of	Directors •	Joined	Intel	in	1988

# Thomas	M.	Kilroy,	age	56

# ITEM	1A. RISK	FACTORS

# Changes	in	product	demand	may	harm	our	financial	results	and	are	hard	to	predict.

If	product	demand	decreases,	our	revenue	and	profit	could	be	harmed.	Important	factors	that	could	cause	demand	for	our	products	to	decrease	include changes	in:

•business	conditions,	including	downturns	in	the	computing	industry,	regional	economies,	and	the	overall	economy;

•consumer	confidence	or	income	levels	caused	by	changes	in	market	conditions,	including	changes	in	government	borrowing,	taxation,	or	spending policies;	the	credit	market;	or	expected	inflation,	employment,	and	energy	or	other	commodity	prices;

•the	level	of	customers'	inventories;

•competitive	and	pricing	pressures,	including	actions	taken	by	competitors;

•customer	product	needs;

•market	acceptance	of	our	products	and	maturing	product	cycles;	and

•the	technology	supply	chain,	including	supply	constraints	caused	by	natural	disasters	or	other	events.

Our	operations	have	high	costs—including	costs	related	to	facility	construction	and	equipment,	R&D,	and	employment	and	training	of	a	highly	skilled workforce—that	are	either	fixed	or	difficult	to	reduce	in	the	short	term.	At	the	same	time,	demand	for	our	products	is	highly	variable	and,	in	recent	years, we	have	experienced	declining	orders	in	the	traditional	PC	market	segment,	which	has	been	negatively	impacted	by	the	growth	in	ultra-mobile	devices such	as	tablets	and	smartphones.	If	product	demand	decreases	or	we	fail	to	forecast	demand	accurately,	we	could	be	required	to	write	off	inventory	or record	excess	capacity	charges,	which	would	lower	our	gross	margin.	Our	manufacturing	or	assembly	and	test	capacity	could	be	underutilized,	and	we may	be	required	to	write	down	our	long-lived	assets,	which	would	increase	our	expenses.	Factory-planning	decisions	may	shorten	the	useful	lives	of facilities	and	equipment	and	cause	us	to	accelerate	depreciation.	If	product	demand	increases,	we	may	be	unable	to	add	capacity	fast	enough	to	meet market	demand.	Our	revenue	and	gross	margin	percentage	can	also	be	affected	by	the	timing	of	our	product	introductions	and	related	expenses,	including marketing	expenses.	Changes	in	product	demand,	and	changes	in	our	customers'	product	needs,	could	negatively	affect	our	competitive	position	and	may reduce	our	revenue,	increase	our	costs,	lower	our	gross	margin	percentage,	or	require	us	to	write	down	our	assets.

# We	operate	in	highly	competitive	industries,	and	our	failure	to	anticipate	and	respond	to	technological	and	market	developments	could	harm our	ability	to	compete.

We	operate	in	highly	competitive	industries	that	experience	rapid	technological	and	market	developments,	changes	in	industry	standards,	changes	in customer	needs,	and	frequent	product	introductions	and	improvements.	If	we	are	unable	to	anticipate	and	respond	to	these	developments,	we	might weaken	our	competitive	position,	and	our	products	or	technologies	might	be	uncompetitive	or	obsolete.	As	computing	market	segments	emerge,	such	as smartphones,	tablets,	and	consumer	electronics	devices,	we	face	new	sources	of	competition	and	customers	with	needs	different	from	those	of	customers in	the	PC	market	segment.	Some	of	our	competitors	are	pursuing	a	vertical	integration	strategy,	incorporating	their	SoC	solutions	into	the	smartphones and	tablets	they	offer,	which	could	make	it	less	likely	that	they	will	adopt	our	SoC	solutions.	To	be	successful,	we	need	to	cultivate	new	industry relationships	in	these	market	segments.	As	the	number	and	variety	of	Internet-connected	devices	increase,	we	need	to	continuously	improve	the	cost, connectivity,	integration,	features,	energy	efficiency,	and	security	of	our	platforms,	among	other	things,	to	succeed	in	these	market	segments.	In	addition, we	need	to	expand	our	software	capabilities	to	provide	customers	with	comprehensive	computing	solutions.

To	compete	successfully,	we	must	maintain	a	successful	R&D	effort,	develop	new	products	and	production	processes,	and	improve	our	existing	products and	processes	ahead	of	competitors.	For	example,	we	invest	substantially	in	our	network	of	manufacturing,	assembly	and	test	facilities,	including	the construction	of	new	fabrication	facilities	to	support	smaller	transistor	geometries	and	larger	wafers.	Our	R&D	efforts	are	critical	to	our	success	and	are aimed	at	solving	complex	problems,	and	we	do	not	expect	all	of	our	projects	to	be	successful.	We	may	be	unable	to	develop	and	market	new	products successfully,	and	the	products	we	invest	in	and	develop	may	not	be	well	received	by	customers.	Our	R&D	investments	may	not	generate	significant operating	income	or	contribute	to	our	future	operating	results	for	several	years	and	such	contributions	may	not	meet	our	expectations	or	even	cover	the costs	of	such	investments.	Additionally,	the	products	and	technologies	offered	by	others	may	affect	demand	for	or	pricing	of	our	products.	These	types	of events	could	negatively	affect	our	competitive	position	and	may	reduce	revenue,	increase	costs,	lower	gross	margin	percentage,	or	require	us	to	impair	our assets.

# Changes	in	the	mix	of	products	sold	may	harm	our	financial	results.

Because	of	the	wide	price	differences	of	platform	average	selling	prices	among	our	data	center,	PC	client,	and	Other	IA	platforms,	a	change	in	the	mix	of platforms	among	these	market	segments	may	impact	our	revenue	and	gross	margin.	For	example,	our	PC	client	platforms	that	are	incorporated	in notebook	and	desktop	computers	tend	to	have	lower	average	selling	prices	and	gross	margin	than	our	data	center	platforms	that	are	incorporated	in servers,	workstations	and	storage	products.	Therefore,	if	there	is	less	demand	for	our	data	center	platforms,	and	a	resulting	mix	shift	to	our	PC	client platforms,	our	gross	margins	and	revenue	would	decrease.	Also,	more	recently	introduced	products	tend	to	have	higher	costs	because	of	initial development	costs	and	lower	production	volumes	relative	to	the	previous	product	generation,	which	can	impact	gross	margin.

# Our	global	operations	subject	us	to	risks	that	may	harm	our	results	of	operations	and	financial	condition.

We	have	sales	offices,	R&D,	manufacturing,	assembly	and	test	facilities,	and	other	facilities	in	many	countries,	and	some	business	activities	may	be concentrated	in	one	or	more	geographic	areas.	As	a	result,	our	ability	to	manufacture,	assemble	and	test,	design,	develop,	or	sell	products	may	be affected	by:

•security	concerns,	such	as	armed	conflict	and	civil	or	military	unrest,	crime,	political	instability,	and	terrorist	activity;

•natural	disasters	and	health	concerns;

•inefficient	and	limited	infrastructure	and	disruptions,	such	as	supply	chain	interruptions	and	large-scale	outages	or	interruptions	of	service	from	utilities, transportation,	or	telecommunications	providers;

•restrictions	on	our	operations	by	governments	seeking	to	support	local	industries,	nationalization	of	our	operations,	and	restrictions	on	our	ability	to repatriate	earnings;

•differing	employment	practices	and	labor	issues;	and

•local	business	and	cultural	factors	that	differ	from	our	normal	standards	and	practices,	including	business	practices	that	we	are	prohibited	from engaging	in	by	the	Foreign	Corrupt	Practices	Act	(FCPA)	and	other	anti-corruption	laws	and	regulations.

Legal	and	regulatory	requirements	differ	among	jurisdictions	worldwide.	Violations	of	these	laws	and	regulations	could	result	in	fines;	criminal	sanctions against	us,	our	officers,	or	our	employees;	prohibitions	on	the	conduct	of	our	business;	and	damage	to	our	reputation.	Although	we	have	policies,	controls, and	procedures	designed	to	ensure	compliance	with	these	laws,	our	employees,	contractors,	or	agents	may	violate	our	policies.

Although	most	of	our	sales	occur	in	U.S.	dollars,	expenses	such	as	payroll,	utilities,	tax,	and	marketing	expenses	may	be	paid	in	local	currencies.	We	also conduct	certain	investing	and	financing	activities	in	local	currencies.	Our	hedging	programs	reduce,	but	do	not	eliminate,	the	impact	of	currency	exchange rate	movements;	therefore,	changes	in	exchange	rates	could	harm	our	results	of	operations	and	financial	condition.	Changes	in	tariff	and	import regulations	and	in	U.S.	and	non-U.S.	monetary	policies	may	harm	our	results	of	operations	and	financial	condition	by	increasing	our	expenses	and reducing	revenue.	Differing	tax	rates	in	various	jurisdictions	could	harm	our	results	of	operations	and	financial	condition	by	increasing	our	overall	tax	rate.

We	maintain	a	program	of	insurance	coverage	for	a	variety	of	property,	casualty,	and	other	risks.	We	place	our	insurance	coverage	with	multiple	carriers in	numerous	jurisdictions.	However,	one	or	more	of	our	insurance	providers	may	be	unable	or	unwilling	to	pay	a	claim.	The	types	and	amounts	of insurance	we	obtain	vary	depending	on	availability,	cost,	and	decisions	with	respect	to	risk	retention.	The	policies	have	deductibles	and	exclusions	that result	in	us	retaining	a	level	of	self-insurance.	Losses	not	covered	by	insurance	may	be	large,	which	could	harm	our	results	of	operations	and	financial condition.

# Failure	to	meet	our	production	targets,	resulting	in	undersupply	or	oversupply	of	products,	may	harm	our	business	and	results	of	operations.

Production	of	integrated	circuits	is	a	complex	process.	Disruptions	in	this	process	can	result	from	errors,	difficulties	in	our	development	and implementation	of	new	processes,	defects	in	materials,	disruptions	in	our	supply	of	materials	or	resources,	and	disruptions	at	our	fabrication	and	assembly and	test	facilities	due	to	accidents,	maintenance	issues,	or	unsafe	working	conditions—all	of	which	could	affect	the	timing	of	production	ramps	and	yields. We	may	not	be	successful	or	efficient	in	developing	or	implementing	new	production	processes.	Production	issues	may	result	in	our	failure	to	meet	or increase	production	as	desired,	resulting	in	higher	costs	or	large	decreases	in	yields,	which	could	affect	our	ability	to	produce	sufficient	volume	to	meet product	demand.	The	unavailability	or	reduced	availability	of	products	could	make	it	more	difficult	to	deliver	computing	platforms.	The	occurrence	of	these events	could	harm	our	business	and	results	of	operations.

# We	may	have	difficulties	obtaining	the	resources	or	products	we	need	for	manufacturing,	assembling	and	testing	our	products,	or	operating other	aspects	of	our	business,	which	could	harm	our	ability	to	meet	demand	and	increase	our	costs.

We	have	thousands	of	suppliers	providing	materials	that	we	use	in	production	and	other	aspects	of	our	business,	and	where	possible,	we	seek	to	have several	sources	of	supply	for	all	of	those	materials.	However,	we	may	rely	on	a	single	or	a	limited	number	of	suppliers,	or	upon	suppliers	in	a	single location,	for	these	materials.	The	inability	of	suppliers	to	deliver	adequate	supplies	of	production	materials	or	other	supplies	could	disrupt	our	production processes	or	make	it	more	difficult	for	us	to	implement	our	business	strategy.	Production	could	be	disrupted	by	the	unavailability	of	resources	used	in production,	such	as	water,	silicon,	electricity,	gases,	and	other	materials.	Future	environmental	regulations	could	restrict	the	supply	or	increase	the	cost	of materials	that	we	use	in	our	business	and	make	it	more	difficult	to	obtain	permits	to	build	or	modify	manufacturing	capacity	to	meet	demand.	The unavailability	or	reduced	availability	of	materials	or	resources	may	require	us	to	reduce	production	or	incur	additional	costs.	The	occurrence	of	these events	could	harm	our	business	and	results	of	operations.

# Costs	related	to	product	defects	and	errata	may	harm	our	results	of	operations	and	business.

Costs	of	product	defects	and	errata	(deviations	from	published	specifications)	due	to,	for	example,	problems	in	our	design	and	manufacturing	processes, could	include:

•writing	off	the	value	of	inventory;

•disposing	of	products	that	cannot	be	fixed;

•recalling	products	that	have	been	shipped;

•providing	product	replacements	or	modifications;	and

•defending	against	litigation.

These	costs	could	be	large	and	may	increase	expenses	and	lower	gross	margin.	Our	reputation	with	customers	or	end	users	could	be	damaged	as	a result	of	product	defects	and	errata,	and	product	demand	could	be	reduced.	The	announcement	of	product	defects	and	errata	could	cause	customers	to purchase	products	from	competitors	as	a	result	of	possible	shortages	of	Intel	components	or	for	other	reasons.	These	factors	could	harm	our	business	and financial	results.

# Third	parties	might	attempt	to	gain	unauthorized	access	to	our	network	or	seek	to	compromise	our	products	and	services,	which	could damage	our	reputation	and	financial	results.

We	regularly	face	attempts	by	others	to	gain	unauthorized	access	through	the	Internet	or	to	introduce	malicious	software	to	our	IT	systems.	Additionally, malicious	hackers	may	attempt	to	gain	unauthorized	access	and	corrupt	the	processes	of	hardware	and	software	products	that	we	manufacture	and services	we	provide.	These	attempts	might	be	the	result	of	industrial	or	other	espionage	or	actions	by	hackers	seeking	to	harm	our	company,	our	products and	services,	or	users	of	our	products	and	services.	Due	to	the	widespread	use	of	our	products	and	due	to	the	high	profile	of	our	McAfee	subsidiary,	we	or our	products	and	services	are	a	frequent	target	of	computer	hackers	and	organizations	that	intend	to	sabotage,	take	control	of,	or	otherwise	corrupt	our manufacturing	or	other	processes,	products	and	services.	We	are	also	a	target	of	malicious	attackers	who	attempt	to	gain	access	to	our	network	or	data centers	or	those	of	our	customers	or	end	users;	steal	proprietary	information	related	to	our	business,	products,	employees	and	customers;	or	interrupt	our systems	and	services	or	those	of	our	customers	or	others.	We	believe	such	attempts	are	increasing	in	number	and	in	technical	sophistication.	These attacks	are	sometimes	successful;	and	in	some	instances,	we,	our	customers,	and	the	users	of	our	products	and	services	might	be	unaware	of	an	incident or	its	magnitude	and	effects.	We	seek	to	detect	and	investigate	such	attempts	and	incidents	and	to	prevent	their	recurrence	where	practicable	through changes	to	our	internal	processes	and	tools	and/or	changes	or	patches	to	our	products	and	services,	but	in	some	cases	preventive	and	remedial	action might	not	be	successful.	Such	attacks,	whether	successful	or	unsuccessful,	could	result	in	our	incurring	costs	related	to,	for	example,	rebuilding	internal systems,	reduced	inventory	value,	providing	modifications	to	our	products	and	services,	defending	against	litigation,	responding	to	regulatory	inquiries	or actions,	paying	damages,	or	taking	other	remedial	steps	with	respect	to	third	parties.	Publicity	about	vulnerabilities	and	attempted	or	successful	incursions could	damage	our	reputation	with	customers	or	users	and	reduce	demand	for	our	products	and	services.

# We	may	be	subject	to	theft,	loss	or	misuse	of	personal	data	about	us	or	our	employees,	customers	or	other	third	parties,	which	could	increase our	expenses,	damage	our	reputation	or	result	in	litigation.

Global	privacy	legislation,	enforcement,	and	policy	activity	are	rapidly	expanding	and	creating	a	complex	compliance	environment.	The	theft,	loss,	or misuse	of	personal	data	collected,	used,	stored,	or	transferred	by	us	to	run	our	business	could	result	in	increased	security	costs	or	costs	related	to defending	legal	claims.	Costs	to	comply	with	and	implement	privacy-related	and	data	protection	measures	could	be	significant.	Our	failure	to	comply	with federal,	state,	or	international	privacy-related	or	data	protection	laws	and	regulations	could	result	in	proceedings	against	us	by	governmental	entities	or others.

# Third	parties	may	claim	infringement	of	IP	rights,	which	could	harm	our	business.

We	may	face	IP	rights	infringement	claims	from	individuals	and	companies,	including	those	who	have	acquired	patent	portfolios	to	assert	claims	against other	companies.	We	are	engaged	in	a	number	of	litigation	matters	involving	IP	rights.	Claims	that	our	products	or	processes	infringe	the	IP	rights	of others	could	cause	us	to	incur	large	costs	to	respond	to,	defend,	and	resolve	the	claims,	and	they	may	divert	the	efforts	and	attention	of	management	and technical	personnel.	As	a	result	of	IP	rights	infringement	claims,	we	could:

•pay	monetary	damages	for	infringement	claims;

•stop	manufacturing,	using,	selling,	offering	to	sell	or	importing	products	or	technology	subject	to	infringement	claims;

•develop	other	products	or	technology	not	subject	to	infringement	claims,	which	could	be	time-consuming,	costly	or	impossible;	or

•license	technology	from	the	party	claiming	infringement,	which	license	may	not	be	available	on	commercially	reasonable	terms.

These	actions	could	harm	our	competitive	position,	result	in	expenses,	or	require	us	to	impair	our	assets.	If	we	alter	or	stop	production	of	affected	items, our	revenue	could	be	harmed.

# We	may	be	unable	to	enforce	or	protect	our	IP	rights,	which	may	harm	our	ability	to	compete	and	may	harm	our	business.

Our	ability	to	enforce	our	patents,	copyrights,	software	licenses,	and	other	IP	rights	is	subject	to	general	litigation	risks,	as	well	as	uncertainty	as	to	the enforceability	of	our	IP	rights	in	various	countries.	When	we	seek	to	enforce	our	rights,	we	are	often	subject	to	claims	that	the	IP	rights	are	invalid,	not enforceable,	or	licensed	to	the	opposing	party.	Our	assertion	of	IP	rights	often	results	in	the	other	party	seeking	to	assert	claims	against	us,	which	could harm	our	business.	Governments	may	adopt	regulations—and	governments	or	courts	may	render	decisions—requiring	compulsory	licensing	of	IP	rights, or	governments	may	require	products	to	meet	standards	that	serve	to	favor	local	companies.	Our	inability	to	enforce	our	IP	rights	under	these circumstances	may	harm	our	competitive	position	and	business.

# We	may	be	subject	to	IP	theft	or	misuse,	which	could	result	in	claims	against	us	and	harm	our	business	and	results	of	operations.

The	theft	or	unauthorized	use	or	publication	of	our	trade	secrets	and	other	confidential	business	information	could	harm	our	competitive	position	and reduce	acceptance	of	our	products;	the	value	of	our	investment	in	R&D,	product	development,	and	marketing	could	be	reduced.	In	addition,	the	theft	or unauthorized	use	or	publication	of	third	party	trade	secrets	and	other	confidential	business	information	that	we	obtain	in	conducting	our	business	might lead	to	third-party	claims	against	us	related	to	the	loss	of	the	confidential	or	proprietary	information	or	end-user	data.	Any	such	incidents	and	claims	could severely	disrupt	our	business,	and	we	could	suffer	losses,	including	the	cost	of	product	recalls	and	returns	and	reputational	harm.

# Our	licenses	with	other	companies	and	participation	in	industry	initiatives	may	allow	competitors	to	use	our	patent	rights.

Companies	in	the	computing	industry	often	bilaterally	license	patents	between	each	other	to	settle	disputes	or	as	part	of	business	agreements	between them.	Our	competitors	may	have	licenses	to	our	patents,	and	under	current	case	law,	some	of	the	licenses	may	permit	these	competitors	to	pass	our patent	rights	on	to	others	under	some	circumstances.	Our	participation	in	industry	standards	organizations	or	with	other	industry	initiatives	may	require	us to	license	our	patents	to	companies	that	adopt	industry-standard	specifications.	Depending	on	the	rules	of	the	organization,	we	might	have	to	grant	these licenses	to	our	patents	for	little	or	no	cost,	and	as	a	result,	we	may	be	unable	to	enforce	certain	patents	against	others,	our	costs	of	enforcing	our	licenses or	protecting	our	patents	may	increase,	and	the	value	of	our	IP	rights	may	be	impaired.	In	addition,	we	may	not	be	able	to	obtain	licenses	on	fair, reasonable	and	non-discriminatory	terms	to	patents	asserted	to	be	essential	to	standards	that	we	implement	in	our	products.

# Litigation	or	regulatory	proceedings	could	harm	our	business.

We	may	face	legal	claims	or	regulatory	matters	involving	stockholder,	consumer,	competition,	and	other	issues	on	a	global	basis.	As	described	in	" Note 26:	Contingencies"	in	Part	II,	Item	8	of	this	Form	10-K,	we	are	engaged	in	a	number	of	litigation	and	regulatory	matters.	Litigation	and	regulatory proceedings	are	inherently	uncertain,	and	adverse	rulings	could	occur,	including	monetary	damages,	or	an	injunction	stopping	us	from	manufacturing	or selling	products,	engaging	in	business	practices,	or	requiring	other	remedies,	such	as	compulsory	licensing	of	patents.

# We	face	risks	related	to	sales	through	distributors	and	other	third	parties.

We	sell	a	portion	of	our	products	through	third	parties	such	as	distributors,	value-added	resellers,	OEMs,	Internet	service	providers,	and	channel	partners (collectively	referred	to	as	distributors).	Using	third	parties	for	distribution	exposes	us	to	many	risks,	including	competitive	pressure,	concentration,	credit risk,	and	compliance	risks.	Distributors	may	sell	products	that	compete	with	our	products,	and	we	may	need	to	provide	financial	and	other	incentives	to focus	distributors	on	the	sale	of	our	products.	We	may	rely	on	one	or	more	key	distributors	for	a	product,	and	the	loss	of	these	distributors	could	reduce our	revenue.	Distributors	may	face	financial	difficulties,	including	bankruptcy,	which	could	harm	our	collection	of	accounts	receivable	and	financial	results. Violations	of	FCPA	or	similar	laws	by	distributors	or	other	third-party	intermediaries	could	have	a	material	impact	on	our	business.	Failing	to	manage	risks related	to	our	use	of	distributors	may	reduce	sales,	increase	expenses,	and	weaken	our	competitive	position.

# We	face	risks	related	to	sales	to	government	entities.

We	derive	a	portion	of	our	revenue	from	sales	to	government	entities	and	their	respective	agencies.	Government	demand	and	payment	for	our	products may	be	affected	by	public	sector	budgetary	cycles	and	funding	authorizations.	Government	contracts	are	subject	to	oversight,	including	special	rules	on accounting,	expenses,	reviews,	and	security.	Failing	to	comply	with	these	rules	could	result	in	civil	and	criminal	penalties	and	sanctions,	including termination	of	contracts,	fines	and	suspensions,	or	debarment	from	future	government	business.

# We	invest	in	companies	for	strategic	reasons	and	may	not	realize	a	return	on	our	investments.

We	make	investments	in	companies	around	the	world	to	further	our	strategic	objectives	and	support	key	business	initiatives.	These	investments	include equity	or	debt	instruments	of	public	or	private	companies,	and	many	of	these	instruments	are	non-marketable	at	the	time	of	our	initial	investment. Companies	range	from	early-stage	companies	that	are	still	defining	their	strategic	direction	to	more	mature	companies	with	established	revenue	streams and	business	models.	The	companies	in	which	we	invest	may	fail	because	they	are	unable	to	secure	additional	funding,	obtain	favorable	terms	for	future financings,	or	participate	in	liquidity	events	such	as	public	offerings,	mergers,	and	private	sales.	If	any	of	these	companies	fail,	we	could	lose	all	or	part	of our	investment.	If	we	determine	that	an	other-than-temporary	decline	in	the	fair	value	exists	for	an	investment,	we	write	down	the	investment	to	its	fair value	and	recognize	a	loss,	impacting	gains	(losses)	on	equity	investments,	net.

# Our	results	of	operations	could	vary	as	a	result	of	the	methods,	estimates,	and	judgments	that	we	use	in	applying	accounting	policies.

The	methods,	estimates,	and	judgments	that	we	use	in	applying	accounting	policies	have	a	large	impact	on	our	results	of	operations.	For	more information,	see	"Critical	Accounting	Estimates"	in	Part	II,	Item	7	of	this	Form	10-K.	These	methods,	estimates,	and	judgments	are	subject	to	large	risks, uncertainties,	and	assumptions,	and	changes	could	affect	our	results	of	operations.

# Changes	in	our	effective	tax	rate	may	harm	our	results	of	operations.

A	number	of	factors	may	increase	our	effective	tax	rates,	which	could	reduce	our	net	income,	including:

•the	jurisdictions	in	which	profits	are	determined	to	be	earned	and	taxed;

•the	resolution	of	issues	arising	from	tax	audits;

•changes	in	the	valuation	of	our	deferred	tax	assets	and	liabilities,	and	in	deferred	tax	valuation	allowances;

•adjustments	to	income	taxes	upon	finalization	of	tax	returns;

•increases	in	expenses	not	deductible	for	tax	purposes,	including	write-offs	of	acquired	in-process	research	and	development	and	impairments	of goodwill;

•changes	in	available	tax	credits;

•changes	in	tax	laws	or	their	interpretation,	including	changes	in	the	U.S.	to	the	taxation	of	non-U.S	income	and	expenses;

•changes	in	U.S.	generally	accepted	accounting	principles;	and

•our	decision	to	repatriate	non-U.S.	earnings	for	which	we	have	not	previously	provided	for	U.S.	taxes.

# Decisions	about	the	scope	of	operations	of	our	business	could	affect	our	results	of	operations	and	financial	condition.

Changes	in	the	business	environment	could	lead	to	changes	in	the	scope	of	our	operations,	resulting	in	restructuring	and	asset	impairment	charges	in addition	to	those	announced	in	the	last	twelve	months.	Factors	that	could	affect	our	results	of	operations	and	financial	condition	due	to	a	change	in	the scope	of	our	operations	include:

•timing	and	execution	of	plans	and	programs	subject	to	local	labor	law	requirements,	including	consultation	with	work	councils;

•changes	in	assumptions	related	to	severance	and	postretirement	costs;

•divestitures;

•new	business	initiatives	and	changes	in	product	roadmap,	development,	and	manufacturing;

•changes	in	employment	levels	and	turnover	rates;

•changes	in	product	demand	and	the	business	environment;	and

•changes	in	the	fair	value	of	long-lived	assets.

# Our	acquisitions,	divestitures,	and	other	transactions	could	disrupt	our	ongoing	business	and	harm	our	results	of	operations.

In	pursuing	our	business	strategy,	we	routinely	conduct	discussions,	evaluate	opportunities,	and	enter	into	agreements	for	possible	investments, acquisitions,	divestitures,	and	other	transactions,	such	as	joint	ventures.	Acquisitions	and	other	transactions	involve	large	challenges	and	risks,	including risks	that:

•we	may	be	unable	to	identify	opportunities	on	terms	acceptable	to	us;

•the	transaction	may	not	advance	our	business	strategy;

•we	may	not	realize	a	satisfactory	return;

•we	may	be	unable	to	retain	key	personnel;

•we	may	experience	difficulty	in	integrating	new	employees,	business	systems,	and	technology;

•acquired	businesses	may	not	have	adequate	controls,	processes,	and	procedures	to	ensure	compliance	with	laws	and	regulations,	and	our	due diligence	process	may	not	identify	compliance	issues	or	other	liabilities;

•we	may	have	difficulty	entering	new	market	segments;	or

•we	may	be	unable	to	retain	the	customers	and	partners	of	acquired	businesses.

When	we	decide	to	sell	assets	or	a	business,	we	may	have	difficulty	selling	on	acceptable	terms	in	a	timely	manner,	and	the	agreed-upon	terms	and financing	arrangements	could	be	renegotiated	due	to	changes	in	business	or	market	conditions.	These	circumstances	could	delay	the	achievement	of	our strategic	objectives	or	cause	us	to	incur	added	expense,	or	we	may	sell	a	business	at	a	price	or	on	terms	that	are	less	favorable	than	we	had	anticipated, resulting	in	a	loss	on	the	transaction.

If	we	do	enter	into	agreements	with	respect	to	acquisitions,	divestitures,	or	other	transactions,	we	may	fail	to	complete	them	due	to	factors	such	as: •failure	to	obtain	regulatory	or	other	approvals;

•IP	disputes	or	other	litigation;	or

•difficulties	obtaining	financing	for	the	transaction.

# Our	failure	to	comply	with	environmental	laws	and	regulations	could	harm	our	business	and	results	of	operations.

The	manufacturing	and	assembly	and	test	of	our	products	require	the	use	of	hazardous	materials	that	are	subject	to	a	broad	array	of	EHS	laws	and regulations.	Our	failure	to	comply	with	these	laws	or	regulations	could	result	in:

•regulatory	penalties,	fines,	and	legal	liabilities;

•suspension	of	production;

•alteration	of	our	fabrication	and	assembly	and	test	processes;

•reputational	challenges;	and

•restrictions	on	our	operations	or	sales.

Our	failure	to	manage	the	use,	transportation,	emissions,	discharge,	storage,	recycling,	or	disposal	of	hazardous	materials	could	lead	to	increased	costs or	future	liabilities.	Environmental	laws	and	regulations	could	also	require	us	to	acquire	pollution	abatement	or	remediation	equipment,	modify	product designs,	or	incur	other	expenses.	Many	new	materials	that	we	are	evaluating	for	use	in	our	operations	may	be	subject	to	regulation	under	environmental laws	and	regulations.	These	restrictions	could	harm	our	business	and	results	of	operations	by	increasing	our	expenses	or	requiring	us	to	alter manufacturing	and	assembly	and	test	processes.

In	addition,	the	SEC	has	adopted	disclosure	rules	for	companies	that	use	conflict	minerals	(commonly	referred	to	as	tantalum,	tin,	tungsten,	and	gold)	in their	products,	with	substantial	supply	chain	verification	requirements	in	the	event	that	the	materials	come	from	the	DRC	or	adjoining	countries.	The European	Union	and	other	foreign	jurisdictions	may	in	the	future	also	enact	rules	regarding	conflict	minerals,	which	could	potentially	cover	additional minerals	or	locations	where	minerals	originate.	Due	to	the	complexity	of	our	supply	chain,	we	may	face	reputational	challenges	with	our	customers, stockholders	and	other	stakeholders	if	we	are	unable	to	sufficiently	verify	the	origins	of	the	conflict	minerals	used	in	our	products.

# Climate	change	poses	both	regulatory	and	physical	risks	that	could	harm	our	results	of	operations	and	affect	the	way	we	conduct	business.

In	addition	to	the	possible	direct	economic	impact	that	climate	change	could	have	on	us,	climate	change	mitigation	programs	and	regulations	can	increase our	costs.	The	cost	of	perfluorocompounds	(PFCs)—a	gas	that	we	use	in	manufacturing—could	increase	under	some	climate-change-focused	emissions trading	programs	that	may	be	imposed	through	regulation.	If	the	use	of	PFCs	is	prohibited,	we	would	need	to	obtain	substitute	materials	that	may	cost more	or	be	less	available	for	our	manufacturing	operations.	Air-quality	permit	requirements	for	our	manufacturing	operations	could	become	more burdensome	and	cause	delays	in	our	ability	to	modify	or	build	additional	manufacturing	capacity.	Under	recently	adopted	greenhouse	gas	regulations	in the	U.S.,	many	of	our	manufacturing	facilities	have	become	"major"	sources	under	the	Clean	Air	Act.	At	a	minimum,	this	change	in	status	results	in	some uncertainty	as	the	EPA	adopts	guidance	on	its	greenhouse	gas	regulations.	Due	to	the	dynamic	nature	of	our	operations,	these	regulations	will	likely	result in	increased	costs	for	our	U.S.	operations.	These	cost	increases	could	be	associated	with	new	air	pollution	control	requirements,	and	increased	or	new monitoring,	recordkeeping,	and	reporting	of	greenhouse	gas	emissions.	We	also	see	the	potential	for	higher	energy	costs	driven	by	climate	change regulations.	Our	costs	could	increase	if	utility	companies	pass	on	their	costs,	such	as	those	associated	with	carbon	taxes,	emission	cap	and	trade programs,	or	renewable	portfolio	standards.	While	we	maintain	business	recovery	plans	that	are	intended	to	allow	us	to	recover	from	natural	disasters	or other	events	that	can	be	disruptive	to	our	business,	we	cannot	be	sure	that	our	plans	will	fully	protect	us	from	all	such	disasters	or	events.	Many	of	our operations	are	located	in	semi-arid	regions,	such	as	Israel	and	the	southwestern	U.S.	Some	scenarios	predict	that	these	regions	may	become	even	more vulnerable	to	prolonged	droughts	due	to	climate	change.

# In	order	to	compete,	we	must	attract,	retain,	and	motivate	key	employees,	and	our	failure	to	do	so	could	harm	our	results	of	operations.

In	order	to	compete,	we	must	attract,	retain,	and	motivate	executives	and	other	key	employees.	Hiring	and	retaining	qualified	executives,	scientists, engineers,	technical	staff,	and	sales	representatives	are	critical	to	our	business,	and	competition	for	experienced	employees	in	the	semiconductor	industry can	be	intense.	To	help	attract,	retain,	and	motivate	qualified	employees,	we	use	share-based	incentive	awards	such	as	employee	stock	options	and	non- vested	share	units	(restricted	stock	units).	If	the	value	of	such	stock	awards	does	not	appreciate	as	measured	by	the	performance	of	the	price	of	our common	stock,	or	if	our	share-based	compensation	otherwise	ceases	to	be	viewed	as	a	valuable	benefit,	our	ability	to	attract,	retain,	and	motivate employees	could	be	weakened,	which	could	harm	our	results	of	operations.

# A	number	of	factors	could	lower	interest	and	other,	net	harming	our	results	of	operations.

Factors	that	could	lower	interest	and	other,	net	in	our	consolidated	statements	of	income	include	changes	in	fixed-income,	equity,	and	credit	markets; foreign	currency	exchange	rates;	interest	rates;	credit	standing	of	financial	instrument	counterparties;	our	cash	and	investment	balances;	and	our indebtedness.

# There	are	inherent	limitations	on	the	effectiveness	of	our	controls.

We	do	not	expect	that	our	disclosure	controls	or	our	internal	control	over	financial	reporting	will	prevent	or	detect	all	error	and	all	fraud.	A	control	system, no	matter	how	well	designed	and	operated,	can	provide	only	reasonable,	not	absolute,	assurance	that	the	control	system's	objectives	will	be	met.	The design	of	a	control	system	must	reflect	the	fact	that	there	are	resource	constraints,	and	the	benefits	of	controls	must	be	considered	relative	to	their	costs. Further,	because	of	the	inherent	limitations	in	all	control	systems,	no	evaluation	of	controls	can	provide	absolute	assurance	that	misstatements	due	to error	or	fraud	will	not	occur	or	that	all	control	issues	and	instances	of	fraud,	if	any,	have	been	detected.	The	design	of	any	system	of	controls	is	based	in part	on	certain	assumptions	about	the	likelihood	of	future	events,	and	there	can	be	no	assurance	that	any	design	will	succeed	in	achieving	its	stated	goals under	all	potential	future	conditions.	Projections	of	any	evaluation	of	the	effectiveness	of	controls	to	future	periods	are	subject	to	risks.	Over	time,	controls may	become	inadequate	because	of	changes	in	conditions	or	deterioration	in	the	degree	of	compliance	with	policies	or	procedures.

# ITEM	1B. UNRESOLVED	STAFF	COMMENTS

# Not	applicable.

# ITEM	2. PROPERTIES

As	of	December	28,	2013,	our	major	facilities	consisted	of:

| (Square	Feet	in	Millions) | United<br>States | Other<br>Countries | Total |
| :--- | :--- | :--- | :--- |
| Owned\tfacilities1 | 29.9 | 16.7 | 46.6 |
| Leased\tfacilities2 | 2.3 | 6.0 | 8.3 |
| Total\tfacilities | 32.2 | 22.7 | 54.9 |

2	 Leases	expire	on	varying	dates	through	2028	and	generally	include	renewals	at	our	option.

Our	principal	executive	offices	are	located	in	the	U.S.	and	a	significant	amount	of	our	wafer	fabrication	activities	are	also	located	in	the	U.S.	In	addition	to our	current	facilities,	we	are	building	a	development	fabrication	facility	in	Oregon	which	began	R&D	start-up	in	2013.	We	expect	that	this	new	facility	will allow	us	to	widen	our	process	technology	lead.	We	also	completed	construction	of	a	large-scale	fabrication	building	in	Arizona	in	2013,	which	is	currently not	in	use	and	is	not	being	depreciated.	We	recently	announced	that	we	plan	to	delay	equipment	installation	in	this	building	and	leverage	existing fabrication	facilities,	reserving	this	new	facility	for	additional	capacity	and	future	technologies.	Outside	the	U.S.,	we	have	wafer	fabrication	facilities	in Israel,	China,	and	Ireland.	Our	fabrication	facility	in	Ireland	is	currently	transitioning	to	a	newer	process	technology	node,	with	manufacturing	expected	to recommence	in	2015.	Our	assembly	and	test	facilities	are	located	in	Malaysia,	China,	Costa	Rica,	and	Vietnam .	In	addition,	we	have	sales	and	marketing offices	worldwide	that	are	generally	located	near	major	concentrations	of	customers.

We	believe	that	the	facilities	described	above	are	suitable	and	adequate	for	our	present	purposes	and	that	the	productive	capacity	in	our	facilities	is substantially	being	utilized	or	we	have	plans	to	utilize	it.

We	do	not	identify	or	allocate	assets	by	operating	segment.	For	information	on	net	property,	plant	and	equipment	by	country,	see	" Note	27:	Operating Segments	and	Geographic	Information"	in	Part	II,	Item	8	of	this	Form	10-K.

# ITEM	3. LEGAL	PROCEEDINGS

For	a	discussion	of	legal	proceedings,	see	"Note	26:	Contingencies"	in	Part	II,	Item	8	of	this	Form	10-K.

# ITEM	4. MINE	SAFETY	DISCLOSURES

# PART	II

# ITEM	5. MARKET	FOR	REGISTRANT'S	COMMON	EQUITY,	RELATED	STOCKHOLDER	MATTERS	AND	ISSUER	PURCHASES	OF	EQUITY SECURITIES

Information	regarding	the	principal	U.S.	market	in	which	Intel	common	stock	is	traded,	including	the	market	price	range	of	Intel	common	stock	and dividend	information,	can	be	found	in	"Financial	Information	by	Quarter	(Unaudited)"	in	Part	II,	Item	8	of	this	Form	10-K.

As	of	February	7,	2014,	there	were	approximately	144,000	registered	holders	of	record	of	Intel's	common	stock.	A	substantially	greater	number	of	holders of	Intel	common	stock	are	"street	name"	or	beneficial	holders,	whose	shares	of	record	are	held	by	banks,	brokers,	and	other	financial	institutions.

# Issuer	Purchases	of	Equity	Securities

We	have	an	ongoing	authorization,	originally	approved	by	our	Board	of	Directors	in	October	2005,	and	subsequently	amended,	 to	repurchase	up	to	$45 billion	in	shares	of	our	common	stock	in	open	market	purchases	or	negotiated	transactions.	As	of	 December	28,	2013,	$3.2	billion	remained	available	for repurchase	under	the	existing	repurchase	authorization	limit.

Common	stock	repurchase	activity	under	our	publicly	announced	stock	repurchase	plan	during	each	quarter	of 2013	was	as	follows:

| Period | Total	Number	of<br>Shares	Purchased<br>(In	Millions) | Average	Price<br>Paid	Per	Share | Shares	That	May<br>Yet	Be	Purchased<br>(In	Millions) |
| :--- | :--- | :--- | :--- |
| December\t30,\t2012\t–\tMarch\t30,\t2013 | 25.2 | $21.13 | $4,799 |
| March\t31,\t2013\t–\tJune\t29,\t2013 | 23.3 | $23.58 | $4,249 |
| June\t30,\t2013\t–\tSeptember\t28,\t2013 | 23.6 | $22.79 | $3,713 |
| September\t29,\t2013\t–\tDecember\t28,\t2013 | 22.0 | $24.02 | $3,185 |
| Total | 94.1 | $22.83 |  |

Common	stock	repurchase	activity	under	our	publicly	announced	stock	repurchase	plan	during	the	fourth	quarter	of 2013	was	as	follows:

| Period | Total	Number	of<br>Shares	Purchased<br>(In	Millions) | Average	Price<br>Paid	Per	Share | Yet	Be	Purchased<br>Under	the	Plans<br>(In	Millions) |
| :--- | :--- | :--- | :--- |
| September\t29,\t2013\t–\tOctober\t26,\t2013 | 6.4 | $23.16 | $3,565 |
| October\t27,\t2013\t–\tNovember\t23,\t2013 | 6.7 | $24.30 | $3,402 |
| November\t24,\t2013\t–\tDecember\t28,\t2013 | 8.9 | $24.43 | $3,185 |
| Total | 22.0 | $24.02 |  |

In	our	consolidated	financial	statements,	we	also	treat	shares	withheld	for	tax	purposes	on	behalf	of	our	employees	in	connection	with	the	vesting	of restricted	stock	units	as	common	stock	repurchases	because	they	reduce	the	number	of	shares	that	would	have	been	issued	upon	vesting.	These withheld	shares	are	not	considered	common	stock	repurchases	under	our	authorized	common	stock	repurchase	plan	and	accordingly	are	not	included	in the	common	stock	repurchase	totals	in	the	preceding	table.

For	further	discussion,	see	"Note	20:	Common	Stock	Repurchases"	in	Part	II,	Item	8	of	this	Form	10-K.

# Stock	Performance	Graph

The	line	graph	that	follows	compares	the	cumulative	total	stockholder	return	on	our	common	stock	with	the	cumulative	total	return	of	the	Dow	Jones	U.S. Technology	Index*	and	the	Standard	&	Poor's	S&P	500*	Index	for	the	five	years	ended	December	28,	2013.	The	graph	and	table	assume	that	$100	was invested	on	December	26,	2008	(the	last	day	of	trading	for	the	fiscal	year	ended	December	27,	2008)	in	each	of	our	common	stock,	the	Dow	Jones	U.S. Technology	Index,	and	the	S&P	500	Index,	and	that	all	dividends	were	reinvested.	Cumulative	total	stockholder	returns	for	our	common	stock,	the	Dow Jones	U.S.	Technology	Index,	and	the	S&P	500	Index	are	based	on	our	fiscal	year.

# Comparison	of	Five-Year	Cumulative	Return	for	Intel,

# the	Dow	Jones	U.S.	Technology	Index*,	and	the	S&P	500*	Index

|  | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Intel\tCorporation | $100 | $148 | $157 | $191 | $163 | $214 |
| Dow\tJones\tU.S.\tTechnology\tIndex | $100 | $170 | $191 | $191 | $209 | $270 |
| S&amp;P\t500\tIndex | $100 | $132 | $151 | $154 | $175 | $236 |

# ITEM	6. SELECTED	FINANCIAL	DATA

| (Dollars	in	Millions,	Except	Per	Share	Amounts) | 2013 | 2012 | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\trevenue | $52,708 | $53,341 | $53,999 | $43,623 | $35,127 |
| Gross\tmargin | $31,521 | $33,151 | $33,757 | $28,491 | $19,561 |
| Gross\tmargin\tpercentage | 59.8% | 62.1% | 62.5% | 65.3% | 55.7% |
| Research\tand\tdevelopment\t(R&amp;D) | $10,611 | $10,148 | $8,350 | $6,576 | $5,653 |
| Marketing,\tgeneral\tand\tadministrative\t(MG&amp;A) | $8,088 | $8,057 | $7,670 | $6,309 | $7,931 |
| R&amp;D\tand\tMG&amp;A\tas\tpercentage\tof\trevenue | 35.5% | 34.1% | 29.7% | 29.5% | 38.7% |
| Operating\tincome | $12,291 | $14,638 | $17,477 | $15,588 | $5,711 |
| Net\tincome | $9,620 | $11,005 | $12,942 | $11,464 | $4,369 |
| Earnings\tper\tcommon\tshare |  |  |  |  |  |
| Basic | $1.94 | $2.20 | $2.46 | $2.06 | $0.79 |
| Diluted | $1.89 | $2.13 | $2.39 | $2.01 | $0.77 |
| Weighted\taverage\tdiluted\tcommon\tshares\toutstanding | 5,097 | 5,160 | 5,411 | 5,696 | 5,645 |
| Dividends\tper\tcommon\tshare |  |  |  |  |  |
| Declared | $0.90 | $0.87 | $0.7824 | $0.63 | $0.56 |
| Paid | $0.90 | $0.87 | $0.7824 | $0.63 | $0.56 |
| Net\tcash\tprovided\tby\toperating\tactivities | $20,776 | $18,884 | $20,963 | $16,692 | $11,170 |
| Additions\tto\tproperty,\tplant\tand\tequipment | $10,711 | $11,027 | $10,764 | $5,207 | $4,515 |
| Repurchase\tof\tcommon\tstock | $2,440 | $5,110 | $14,340 | $1,736 | $1,762 |
| Payment\tof\tdividends\tto\tstockholders | $4,479 | $4,350 | $4,127 | $3,503 | $3,108 |

| (Dollars	in	Millions) | Dec.	28,	2013 | Dec.	29,	2012 | Dec.	31,	2011 | Dec.	25,	2010 | Dec.	26,	2009 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Property,\tplant\tand\tequipment,\tnet | $31,428 | $27,983 | $23,627 | $17,899 | $17,225 |
| Total\tassets | $92,358 | $84,351 | $71,119 | $63,186 | $53,095 |
| Long-term\tdebt | $13,165 | $13,136 | $7,084 | $2,077 | $2,049 |
| Stockholders'\tequity | $58,256 | $51,203 | $45,911 | $49,430 | $41,704 |
| Employees\t(in\tthousands) | 107.6 | 105.0 | 100.1 | 82.5 | 79.8 |

During	the	third	quarter	of	2013,	management	approved	and	communicated	several	restructuring	actions	including	targeted	workforce	reductions	as	well as	exit	of	certain	businesses	and	facilities.	For	further	information,	see	"Note	13:	Restructuring	and	Asset	Impairment	Charges"	in	Part	II,	Item	8	of	this Form	10-K.

In	2011,	we	acquired	McAfee	and	the	Wireless	Solutions	(WLS)	business	of	Infineon	Technologies	AG,	which	operates	as	part	of	our	Multi-Comm	and Phone	Group	operating	segments.	For	further	information,	see	"Note	8:	Acquisitions"	in	Part	II,	Item	8	of	this	Form	10-K.

# ITEM	7. MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS

Our	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	(MD&A)	is	provided	in	addition	to	the	accompanying consolidated	financial	statements	and	notes	to	assist	readers	in	understanding	our	results	of	operations,	financial	condition,	and	cash	flows.	MD&A	is organized	as	follows:

•Overview.	Discussion	of	our	business	and	overall	analysis	of	financial	and	other	highlights	affecting	the	company	in	order	to	provide	context	for	the remainder	of	MD&A.

•Critical	Accounting	Estimates.	Accounting	estimates	that	we	believe	are	most	important	to	understanding	the	assumptions	and	judgments incorporated	in	our	reported	financial	results	and	forecasts.

•Results	of	Operations.	An	analysis	of	our	financial	results	comparing	 2013	to	2012	and	comparing	2012	to	2011.

•Liquidity	and	Capital	Resources.	An	analysis	of	changes	in	our	balance	sheets	and	cash	flows,	and	discussion	of	our	financial	condition	and	potential sources	of	liquidity.

•Fair	Value	of	Financial	Instruments.	Discussion	of	the	methodologies	used	in	the	valuation	of	our	financial	instruments.

•Contractual	Obligations	and	Off-Balance-Sheet	Arrangements.	Overview	of	contractual	obligations,	contingent	liabilities,	commitments,	and	off- balance-sheet	arrangements	outstanding	as	of	December	28,	2013,	including	expected	payment	schedule.

The	various	sections	of	this	MD&A	contain	a	number	of	forward-looking	statements	that	involve	a	number	of	risks	and	uncertainties.	Words	such	as "anticipates,"	"expects,"	"intends,"	"plans,"	"believes,"	"seeks,"	"estimates,"	"continues,"	"may,"	"will,"	"should,"	and	variations	of	such	words	and	similar expressions	are	intended	to	identify	such	forward-looking	statements.	In	addition,	any	statements	that	refer	to	projections	of	our	future	financial performance,	our	anticipated	growth	and	trends	in	our	businesses,	uncertain	events	or	assumptions,	and	other	characterizations	of	future	events	or circumstances	are	forward-looking	statements.	Such	statements	are	based	on	our	current	expectations	and	could	be	affected	by	the	uncertainties	and	risk factors	described	throughout	this	filing	and	particularly	in	"Risk	Factors"	in	Part	I,	Item	1A	of	this	Form	10-K.	Our	actual	results	may	differ	materially,	and these	forward-looking	statements	do	not	reflect	the	potential	impact	of	any	divestitures,	mergers,	acquisitions,	or	other	business	combinations	that	had	not been	completed	as	of	February	14,	2014.

# Overview

Our	results	of	operations	for	each	period	were	as	follows:

|  |  | Three	Months	Ended |  |  | Twelve	Months	Ended |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (Dollars\tin\tMillions,\tExcept\tPer\tShare\tAmounts) | Dec.\t28,\n2013 | Sept.\t28,\n2013 | Change | Dec.\t28,\n2013 | Dec.\t29,\n2012 | Change |
| Net\trevenue | $13,834 | $13,483 | $351 | $52,708 | $53,341 | $(633) |
| Gross\tmargin | $8,571 | $8,414 | $157 | $31,521 | $33,151 | $(1,630) |
| Gross\tmargin\tpercentage | 62.0% | 62.4% | (0.4)% | 59.8% | 62.1% | (2.3)% |
| Operating\tincome | $3,549 | $3,504 | $45 | $12,291 | $14,638 | $(2,347) |
| Net\tincome | $2,625 | $2,950 | $(325) | $9,620 | $11,005 | $(1,385) |
| Diluted\tearnings\tper\tcommon\tshare | $0.51 | $0.58 | $(0.07) | $1.89 | $2.13 | $(0.24) |

Revenue	for	2013	was	down	1%	from	2012.	PCCG	experienced	lower	platform	unit	sales	in	the	first	half	of	the	year,	but	saw	offsetting	growth	in	the	back half	as	the	PC	market	began	to	show	signs	of	stabilization.	DCG	continued	to	benefit	from	the	build	out	of	Internet	cloud	computing	and	the	strength	of	our product	portfolio	resulting	in	increased	platform	volumes	for	DCG	for	the	year.	Higher	factory	start-up	costs	for	our	next-generation	14nm	process technology	led	to	a	decrease	in	gross	margin	compared	to	2012.	In	response	to	the	current	business	environment	and	to	better	align	resources, management	approved	several	restructuring	actions	including	targeted	workforce	reductions	as	well	as	the	exit	of	certain	businesses	and	facilities.	These actions	resulted	in	restructuring	and	asset	impairment	charges	of	$240	million	for	2013.

# MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS	(Continued)

Our	Q4	2013	revenue	of	$13.8	billion	was	up	3%	from	Q3	2013.	The	sequential	increase	was	a	result	of	stabilization	in	the	PC	market	which	generated 3%	higher	platform	unit	sales	for	PCCG.	Gross	margin	remained	flat	sequentially	as	lower	platform	unit	costs	were	offset	by	higher	factory	start-up	costs for	our	14nm	process	technology.	The	platform	unit	cost	decline	is	attributable	to	our	22nm	process	technology	coming	down	the	cost	curve	as	we	ramp the	4th	generation	Intel	Core	processor	family	products	in	multiple	fabrication	facilities.

In	2013,	we	introduced	many	new	product	technologies	across	all	of	our	businesses.	Our	product	launches	included	the	4th	generation	Intel	Core processor	family,	Intel	Xeon	22nm	processors,	and	Intel	Atom	microarchitecture	platforms.	As	2013	progressed,	we	shifted	our	focus	and	investment strategy	in	order	to	increase	our	cadence	for	bringing	innovative	products	to	market.	One	example	is	the	announcement	of	Intel	Quark	SoC	which	is	an ultra-low	power	and	cost	architecture	designed	for	the	Internet	of	Things,	from	industrial	machines	to	future	wearable	devices.

The	cash	generation	from	our	business	remained	strong	with	cash	from	operations	of	$20.8	billion	in	2013.	We	ended	the	year	with	an	investment portfolio	of	$20.1	billion,	which	consisted	of	cash	and	cash	equivalents,	short-term	investments,	and	trading	assets.	We	returned	$4.5	billion	to stockholders	through	dividends	and	repurchased	$2.1	billion	of	common	stock	through	our	common	stock	repurchase	program.	We	purchased	$10.7 billion	in	capital	assets	as	we	continued	making	investments	in	new	architectures	and	product	offerings.	In	January	2014,	the	Board	of	Directors	declared	a cash	dividend	of	$0.225	per	common	share	to	be	paid	in	Q1	2014.

Looking	ahead	to	2014,	we	expect	revenue	and	gross	margin	to	remain	flat.	We	believe	our	product	offerings	and	architectures	will	enable	innovation	and allow	for	future	growth	in	the	PC	market	through	all-in-ones,	2	in	1s,	convertibles	and	detachables.	The	launch	of	new	low-power,	high-performance products	will	continue	to	expand	our	footprint	in	tablets	and	our	Internet	of	Things	business.	We	also	continue	to	make	progress	with	the	industry's	first 14nm	manufacturing	process	and	our	second	generation	3-D	transistors	(code-named	"Broadwell").	Our	second	generation	3-D	transistors	will	begin production	in	Q1	2014	and	is	expected	to	launch	in	the	second	half	of	2014.	As	we	continue	to	align	resources	to	focus	on	tablets,	low-power	SoCs,	and the	data	center,	we	will	also	streamline	our	overall	investment	position	in	order	to	hold	spending	flat	for	the	year.

Our	Business	Outlook	for	Q1	2014	and	full-year	2014	includes,	where	applicable,	our	current	expectations	for	revenue,	gross	margin	percentage, spending	(R&D	plus	MG&A),	and	capital	expenditures.	We	will	keep	our	most	current	Business	Outlook	publicly	available	on	our	Investor	Relations	web site	www.intc.com.	This	Business	Outlook	is	not	incorporated	by	reference	in	this	Form	10-K.	We	expect	that	our	corporate	representatives	will,	from	time to	time,	meet	publicly	or	privately	with	investors	and	others,	and	may	reiterate	the	forward-looking	statements	contained	in	the	Business	Outlook	or	in	this Form	10-K.

The	statements	in	the	Business	Outlook	and	forward-looking	statements	in	this	Form	10-K	are	subject	to	revision	during	the	course	of	the	year	in	our quarterly	earnings	releases	and	SEC	filings	and	at	other	times.	The	forward-looking	statements	in	the	Business	Outlook	will	be	effective	through	the	close of	business	on	March	14,	2014,	unless	updated	earlier.	From	the	close	of	business	on	March	14,	2014,	until	our	quarterly	earnings	release	is	published, currently	scheduled	for	April	15,	2014,	we	will	observe	a	"quiet	period."	During	the	quiet	period,	the	Business	Outlook	and	other	forward-looking statements	first	published	in	our	Form	8-K	filed	on	January	16,	2014,	and	other	forward-looking	statements	disclosed	in	the	company's	news	releases	and filings	with	the	SEC,	as	reiterated	or	updated	as	applicable	in	this	Form	10-K,	should	be	considered	historical,	speaking	as	of	prior	to	the	quiet	period	only and	not	subject	to	update.	During	the	quiet	period,	our	representatives	will	not	comment	on	our	Business	Outlook	or	our	financial	results	or	expectations. The	exact	timing	and	duration	of	the	routine	quiet	period,	and	any	others	that	we	utilize	from	time	to	time,	may	vary	at	our	discretion.

# Critical	Accounting	Estimates

The	methods,	estimates,	and	judgments	that	we	use	in	applying	our	accounting	policies	have	a	significant	impact	on	the	results	that	we	report	in	our consolidated	financial	statements.	Some	of	our	accounting	policies	require	us	to	make	difficult	and	subjective	judgments,	often	as	a	result	of	the	need	to make	estimates	regarding	matters	that	are	inherently	uncertain.	Our	most	critical	accounting	estimates	include:

•the	valuation	of	non-marketable	equity	investments	and	the	determination	of	other-than-temporary	impairments,	which	impact	gains	(losses)	on	equity investments,	net	when	we	record	impairments;

•the	assessment	of	recoverability	of	long-lived	assets	(property,	plant	and	equipment;	goodwill;	and	identified	intangibles),	which	impacts	gross	margin or	operating	expenses	when	we	record	asset	impairments	or	accelerate	their	depreciation	or	amortization;

•the	recognition	and	measurement	of	current	and	deferred	income	taxes	(including	the	measurement	of	uncertain	tax	positions),	which	impact	our provision	for	taxes;

•the	valuation	of	inventory,	which	impacts	gross	margin;	and

•the	recognition	and	measurement	of	loss	contingencies,	which	impact	gross	margin	or	operating	expenses	when	we	recognize	a	loss	contingency, revise	the	estimate	for	a	loss	contingency,	or	record	an	asset	impairment.

In	the	following	section,	we	discuss	these	policies	further,	as	well	as	the	estimates	and	judgments	involved.

# Non-Marketable	Equity	Investments

We	regularly	invest	in	non-marketable	equity	instruments	of	private	companies,	which	range	from	early-stage	companies	that	are	often	still	defining	their strategic	direction	to	more	mature	companies	with	established	revenue	streams	and	business	models.	The	carrying	value	of	our	non-marketable	equity investment	portfolio,	excluding	equity	derivatives,	totaled	$2.3	billion	as	of	December	28,	2013	($2.2	billion	as	of	December	29,	2012).

Our	non-marketable	equity	investments	are	recorded	using	the	cost	method	or	the	equity	method	of	accounting,	depending	on	the	facts	and circumstances	of	each	investment.	Our	non-marketable	equity	investments	are	classified	within	other	long-term	assets	on	the	consolidated	balance sheets.

Non-marketable	equity	investments	are	inherently	risky,	and	their	success	depends	on	product	development,	market	acceptance,	operational	efficiency, and	other	key	business	factors.	The	companies	could	fail	or	not	be	able	to	raise	additional	funds	when	needed,	or	they	may	receive	lower	valuations	with less	favorable	investment	terms	than	previous	financings.	These	events	could	cause	our	investments	to	become	impaired.	In	addition,	financial	market volatility	could	negatively	affect	our	ability	to	realize	value	in	our	investments	through	liquidity	events	such	as	initial	public	offerings,	mergers,	and	private sales.	For	further	information	about	our	investment	portfolio	risks,	see	"Risk	Factors"	in	Part	I,	Item	1A	of	this	Form	10-K.

We	determine	the	fair	value	of	our	non-marketable	equity	investments	portfolio	quarterly	for	disclosure	purposes;	however,	the	investments	are	recorded at	fair	value	only	if	an	impairment	charge	is	recognized.	We	determine	the	fair	value	of	our	non-marketable	equity	investments	using	the	market	and income	approaches.	The	market	approach	includes	the	use	of	financial	metrics	and	ratios	of	comparable	public	companies,	such	as	projected	revenue, earnings,	and	comparable	performance	multiples.	The	selection	of	comparable	companies	requires	management	judgment	and	is	based	on	a	number	of factors,	including	comparable	companies'	sizes,	growth	rates,	industries,	and	development	stages.	The	income	approach	includes	the	use	of	a	discounted cash	flow	model,	which	requires	significant	estimates	regarding	the	investees'	revenue,	costs,	and	discount	rates	based	on	the	risk	profile	of	comparable companies.	Estimates	of	revenue	and	costs	are	developed	using	available	market,	historical,	and	forecast	data.	The	valuation	of	these	non-marketable equity	investments	also	takes	into	account	variables	such	as	conditions	reflected	in	the	capital	markets,	recent	financing	activities	by	the	investees,	the investees'	capital	structures,	the	terms	of	the	investees'	issued	interests,	and	the	lack	of	marketability	of	the	investments.

For	non-marketable	equity	investments,	the	measurement	of	fair	value	requires	significant	judgment	and	includes	quantitative	and	qualitative	analysis	of identified	events	or	circumstances	that	impact	the	fair	value	of	the	investment,	such	as:

•the	investee's	revenue	and	earnings	trends	relative	to	pre-defined	milestones	and	overall	business	prospects;

•the	technological	feasibility	of	the	investee's	products	and	technologies;

•the	general	market	conditions	in	the	investee's	industry	or	geographic	area,	including	adverse	regulatory	and	economic	changes;

•factors	related	to	the	investee's	ability	to	remain	in	business,	such	as	the	investee's	liquidity,	debt	ratios,	and	the	rate	at	which	the	investee	is	using	its cash;	and

•the	investee's	receipt	of	additional	funding	at	a	lower	valuation.

If	the	fair	value	of	an	investment	is	below	our	carrying	value,	we	determine	whether	the	investment	is	other-than-temporarily	impaired	based	on	our quantitative	and	qualitative	analysis,	which	includes	assessing	the	severity	and	duration	of	the	impairment	and	the	likelihood	of	recovery	before	disposal.	If the	investment	is	considered	to	be	other-than-temporarily	impaired,	we	write	down	the	investment	to	its	fair	value.	Impairments	of	non-marketable	equity investments	were	$112	million	in	2013	($104	million	in	2012	and	$63	million	in	2011).

# Long-Lived	Assets

# Property,	Plant	and	Equipment

We	assess	property,	plant	and	equipment	for	impairment	when	events	or	changes	in	circumstances	indicate	that	the	carrying	value	of	the	assets	or	the asset	grouping	may	not	be	recoverable.	Factors	that	we	consider	in	deciding	when	to	perform	an	impairment	review	include	significant	under-performance of	a	business	or	product	line	in	relation	to	expectations,	significant	negative	industry	or	economic	trends,	and	significant	changes	or	planned	changes	in our	use	of	the	assets.	We	measure	the	recoverability	of	assets	that	we	will	continue	to	use	in	our	operations	by	comparing	the	carrying	value	of	the	asset grouping	to	our	estimate	of	the	related	total	future	undiscounted	net	cash	flows.	If	an	asset	grouping's	carrying	value	is	not	recoverable	through	the related	undiscounted	cash	flows,	the	asset	grouping	is	considered	to	be	impaired.	We	measure	the	impairment	by	comparing	the	difference	between	the asset	grouping's	carrying	value	and	its	fair	value.	Property,	plant	and	equipment	is	considered	a	non-financial	asset	and	is	recorded	at	fair	value	only	if	an impairment	charge	is	recognized.

Impairments	are	determined	for	groups	of	assets	related	to	the	lowest	level	of	identifiable	independent	cash	flows.	Due	to	our	asset	usage	model	and	the interchangeable	nature	of	our	semiconductor	manufacturing	capacity,	we	must	make	subjective	judgments	in	determining	the	independent	cash	flows	that can	be	related	to	specific	asset	groupings.	In	addition,	as	we	make	manufacturing	process	conversions	and	other	factory	planning	decisions,	we	must make	subjective	judgments	regarding	the	remaining	useful	lives	of	assets,	primarily	process-specific	semiconductor	manufacturing	tools	and	building improvements.	When	we	determine	that	the	useful	lives	of	assets	are	shorter	than	we	had	originally	estimated,	we	accelerate	the	rate	of	depreciation	over the	assets'	new,	shorter	useful	lives.	Based	on	our	analysis,	impairments	and	accelerated	depreciation	of	our	property,	plant,	and	equipment	was	$172 million	in	2013	($73	million	in	2012	and	$100	million	in	2011).

# Goodwill

Goodwill	is	recorded	when	the	purchase	price	for	an	acquisition	exceeds	the	estimated	fair	value	of	the	net	tangible	and	identified	intangible	assets acquired.	Goodwill	is	allocated	to	our	reporting	units	based	on	relative	fair	value	of	the	future	benefit	of	the	purchased	operations	to	our	existing	business units	as	well	as	the	acquired	business	unit.	Reporting	units	may	be	operating	segments	as	a	whole	or	an	operation	one	level	below	an	operating	segment, referred	to	as	a	component.	Our	reporting	units	are	consistent	with	the	operating	segments	identified	in	"Note	27:	Operating	Segments	and	Geographic Information"	in	Part	II,	Item	8	of	this	Form	10-K.

We	perform	an	annual	impairment	assessment	in	the	fourth	quarter	of	each	year,	or	more	frequently	if	indicators	of	potential	impairment	exist,	to determine	whether	it	is	more	likely	than	not	that	the	fair	value	of	a	reporting	unit	in	which	goodwill	resides	is	less	than	its	carrying	value.	For	reporting	units in	which	this	assessment	concludes	that	it	is	more	likely	than	not	that	the	fair	value	is	more	than	its	carrying	value,	goodwill	is	not	considered	impaired	and we	are	not	required	to	perform	the	two-step	goodwill	impairment	test.	Qualitative	factors	considered	in	this	assessment	include	industry	and	market considerations,	overall	financial	performance,	and	other	relevant	events	and	factors	affecting	the	reporting	unit.

For	reporting	units	in	which	the	impairment	assessment	concludes	that	it	is	more	likely	than	not	that	the	fair	value	is	less	than	its	carrying	value,	we perform	the	first	step	of	the	goodwill	impairment	test,	which	compares	the	fair	value	of	the	reporting	unit	to	its	carrying	value.	If	the	fair	value	of	the reporting	unit	exceeds	the	carrying	value	of	the	net	assets	assigned	to	that	unit,	goodwill	is	not	considered	impaired	and	we	are	not	required	to	perform additional	analysis.	If	the	carrying	value	of	the	net	assets	assigned	to	the	reporting	unit	exceeds	the	fair	value	of	the	reporting	unit,	then	we	must	perform the	second	step	of	the	goodwill	impairment	test	to	determine	the	implied	fair	value	of	the	reporting	unit's	goodwill.	If	we	determine	during	the	second	step that	the	carrying	value	of	a	reporting	unit's	goodwill	exceeds	its	implied	fair	value,	we	record	an	impairment	loss	equal	to	the	difference.

Determining	the	fair	value	of	a	reporting	unit	involves	the	use	of	significant	estimates	and	assumptions.	Our	goodwill	impairment	test	uses	a	weighting	of the	income	method	and	the	market	method	to	estimate	a	reporting	unit's	fair	value.	The	income	method	is	based	on	a	discounted	future	cash	flow approach	that	uses	the	following	reporting	unit	estimates:	revenue,	based	on	assumed	market	segment	growth	rates	and	our	assumed	market	segment share;	estimated	costs;	and	appropriate	discount	rates	based	on	a	reporting	unit's	weighted	average	cost	of	capital	as	determined	by	considering	the observable	weighted	average	cost	of	capital	of	comparable	companies.	Our	estimates	of	market	segment	growth,	our	market	segment	share,	and	costs are	based	on	historical	data,	various	internal	estimates,	and	a	variety	of	external	sources.	These	estimates	are	developed	as	part	of	our	routine	long-range planning	process.	The	same	estimates	are	also	used	in	planning	for	our	long-term	manufacturing	and	assembly	and	test	capacity	needs	as	part	of	our capital	budgeting	process,	and	for	long-term	and	short-term	business	planning	and	forecasting.	We	test	the	reasonableness	of	the	inputs	and	outcomes	of our	discounted	cash	flow	analysis	against	available	comparable	market	data.	The	market	method	is	based	on	financial	multiples	of	comparable	companies and	applies	a	control	premium.	A	reporting	unit's	carrying	value	represents	the	assignment	of	various	assets	and	liabilities,	excluding	certain	corporate assets	and	liabilities,	such	as	cash,	investments,	and	debt.

For	the	annual	impairment	assessment	in	2013,	we	determined	that	for	each	of	our	reporting	units	with	significant	amounts	of	goodwill,	it	was	more	likely than	not	that	the	fair	value	of	the	reporting	units	exceeded	the	carrying	value.	As	a	result,	we	concluded	that	performing	the	first	step	of	the	goodwill impairment	test	was	not	necessary	for	those	reporting	units.	During	the	fourth	quarter	of	each	of	the	prior	three	fiscal	years,	we	have	completed	our annual	impairment	assessments	and	concluded	that	goodwill	was	not	impaired	in	any	of	these	years.

# Identified	Intangibles

We	make	judgments	about	the	recoverability	of	purchased	finite-lived	intangible	assets	whenever	events	or	changes	in	circumstances	indicate	that	an impairment	may	exist.	Recoverability	of	finite-lived	intangible	assets	is	measured	by	comparing	the	carrying	amount	of	the	asset	to	the	future	undiscounted cash	flows	that	the	asset	is	expected	to	generate.	We	perform	an	annual	impairment	assessment	in	the	fourth	quarter	of	each	year	for	indefinite-lived intangible	assets,	or	more	frequently	if	indicators	of	potential	impairment	exist,	to	determine	whether	it	is	more	likely	than	not	that	the	carrying	value	of	the assets	may	not	be	recoverable.	Recoverability	of	indefinite-lived	intangible	assets	is	measured	by	comparing	the	carrying	amount	of	the	asset	to	the	future discounted	cash	flows	that	the	asset	is	expected	to	generate.	If	we	determine	that	an	individual	asset	is	impaired,	the	amount	of	any	impairment	is measured	as	the	difference	between	the	carrying	value	and	the	fair	value	of	the	impaired	asset.

The	assumptions	and	estimates	used	to	determine	future	values	and	remaining	useful	lives	of	our	intangible	and	other	long-lived	assets	are	complex	and subjective.	They	can	be	affected	by	various	factors,	including	external	factors	such	as	industry	and	economic	trends,	and	internal	factors	such	as	changes in	our	business	strategy	and	our	forecasts	for	specific	product	lines.	Based	on	our	impairment	assessment,	we	recognized	impairment	charges	of	$17 million	in	2013	($21	million	in	2012	and	$10	million	in	2011).

# Income	Taxes

We	must	make	estimates	and	judgments	in	determining	the	provision	for	taxes	for	financial	statement	purposes.	These	estimates	and	judgments	occur	in the	calculation	of	tax	credits,	benefits,	and	deductions,	and	in	the	calculation	of	certain	tax	assets	and	liabilities	that	arise	from	differences	in	the	timing	of recognition	of	revenue	and	expense	for	tax	and	financial	statement	purposes,	as	well	as	the	interest	and	penalties	related	to	uncertain	tax	positions. Significant	changes	in	these	estimates	may	result	in	an	increase	or	decrease	to	our	tax	provision	in	a	subsequent	period.

We	must	assess	the	likelihood	that	we	will	be	able	to	recover	our	deferred	tax	assets.	If	recovery	is	not	more	likely	than	not,	we	must	increase	our provision	for	taxes	by	recording	a	valuation	allowance	against	the	deferred	tax	assets	that	we	estimate	will	not	ultimately	be	recoverable.	We	believe	that we	will	ultimately	recover	the	deferred	tax	assets	recorded	on	our	consolidated	balance	sheets.	However,	should	a	change	occur	in	our	ability	to	recover our	deferred	tax	assets,	our	tax	provision	would	increase	in	the	period	in	which	we	determined	that	the	recovery	is	not	more	likely	than	not.	Recovery	of	a portion	of	our	deferred	tax	assets	is	impacted	by	management's	plans	with	respect	to	holding	or	disposing	of	certain	investments;	therefore,	changes	in management's	plans	with	respect	to	holding	or	disposing	of	investments	could	affect	our	future	provision	for	taxes.

We	recognize	liabilities	for	uncertain	tax	positions	based	on	a	two-step	process.	The	first	step	is	to	evaluate	the	tax	position	for	recognition	by	determining whether	the	weight	of	available	evidence	indicates	that	it	is	more	likely	than	not	that	the	position	will	be	sustained	on	audit,	including	resolution	of	related appeals	or	litigation	processes,	if	any.	If	we	determine	that	a	tax	position	will	more	likely	than	not	be	sustained	on	audit,	the	second	step	requires	us	to estimate	and	measure	the	tax	benefit	as	the	largest	amount	that	is	more	than	50%	likely	to	be	realized	upon	ultimate	settlement.	We	consider	many factors	when	evaluating	and	estimating	our	tax	positions	and	tax	benefits,	which	may	require	periodic	adjustments	and	may	not	accurately	forecast	actual outcomes.	Determining	whether	an	uncertain	tax	position	is	effectively	settled	requires	judgment.	Such	a	change	in	recognition	or	measurement	would result	in	the	recognition	of	a	tax	benefit	or	an	additional	charge	to	the	tax	provision.

We	have	not	recognized	U.S.	deferred	income	taxes	on	certain	undistributed	non-U.S.	earnings	because	we	plan	to	indefinitely	reinvest	such	earnings outside	the	U.S.	Remittances	of	non-U.S.	earnings	are	based	on	estimates	and	judgments	of	projected	cash	flow	needs	as	well	as	the	working	capital	and investment	requirements	of	our	non-U.S.	and	U.S.	operations.	Material	changes	in	our	estimates	of	cash,	working	capital,	and	investment	needs	in	the various	jurisdictions	could	require	repatriation	of	indefinitely	reinvested	non-U.S.	earnings,	which	would	be	subject	to	U.S.	income	taxes	and	applicable non-U.S.	income	and	withholding	taxes.

# Inventory

Intel	has	a	product	development	lifecycle	that	corresponds	with	substantive	engineering	milestones.	These	engineering	milestones	are	regularly	and consistently	applied	in	assessing	the	point	at	which	our	activities,	and	associated	costs,	change	in	nature	from	R&D	to	cost	of	sales.	In	order	for	a	product to	be	manufactured	in	high	volumes	and	sold	to	our	customers	under	our	standard	warranty,	it	must	meet	our	rigorous	technical	quality	specifications.	This milestone	is	known	as	product	release	qualification	(PRQ).	We	have	identified	PRQ	as	the	point	at	which	the	costs	incurred	to	manufacture	our	products are	included	in	the	valuation	of	inventory.

To	determine	which	costs	can	be	included	in	the	valuation	of	inventory,	we	must	determine	normal	capacity	at	our	manufacturing	and	assembly	and	test facilities,	based	on	historical	loadings	compared	to	total	available	capacity.	If	the	factory	loadings	are	below	the	established	normal	capacity	level,	a portion	of	our	manufacturing	overhead	costs	would	not	be	included	in	the	cost	of	inventory;	therefore,	it	would	be	recognized	as	cost	of	sales	in	that period,	which	would	negatively	impact	our	gross	margin.	We	refer	to	these	costs	as	excess	capacity	charges.	Excess	capacity	charges	were	$319	million in	2013	($540	million	in	2012	and	$46	million	in	2011).

Inventory	is	valued	at	the	lower	of	cost	or	market	based	upon	assumptions	about	future	demand	and	market	conditions.	Product-specific	facts	and circumstances	reviewed	in	the	inventory	valuation	process	include	a	review	of	our	customer	base,	the	stage	of	the	product	life	cycle	of	our	products, consumer	confidence,	customer	acceptance	of	our	products,	and	an	assessment	of	selling	price	in	relation	to	product	cost.	If	the	estimated	market	value	of the	inventory	is	less	than	the	carrying	value,	we	write	down	the	inventory	and	record	the	difference	as	a	charge	to	cost	of	sales.

The	valuation	of	inventory	also	requires	us	to	estimate	obsolete	and	excess	inventory	as	well	as	inventory	that	is	not	of	saleable	quality.	The	demand forecast	is	utilized	in	the	development	of	our	short-term	manufacturing	plans	to	enable	consistency	between	inventory	valuation	and	build	decisions.	The estimate	of	future	demand	is	compared	to	work-in-process	and	finished	goods	inventory	levels	to	determine	the	amount,	if	any,	of	obsolete	or	excess inventory.	If	our	demand	forecast	for	specific	products	is	greater	than	actual	demand	and	we	fail	to	reduce	manufacturing	output	accordingly,	we	could	be required	to	write	off	inventory,	which	would	negatively	impact	our	gross	margin.

# Loss	Contingencies

We	are	subject	to	various	legal	and	administrative	proceedings	and	asserted	and	potential	claims,	as	well	as	accruals	related	to	repair	or	replacement	of parts	in	connection	with	product	errata	and	product	warranties	that	arise	in	the	ordinary	course	of	business.	An	estimated	loss	from	such	contingencies	is recognized	as	a	charge	to	income	if	it	is	probable	that	a	liability	has	been	incurred	and	the	amount	of	the	loss	can	be	reasonably	estimated.	Disclosure	of a	loss	contingency	is	required	if	there	is	at	least	a	reasonable	possibility	that	a	material	loss	has	been	incurred.	The	outcomes	of	legal	and	administrative proceedings	and	claims,	and	the	estimation	of	product	warranties	and	asset	impairments,	are	subject	to	significant	uncertainty.	Significant	judgment	is required	in	both	the	determination	of	probability	and	the	determination	as	to	whether	a	loss	is	reasonably	estimable.	With	respect	to	estimating	the	losses associated	with	repairing	and	replacing	parts	in	connection	with	product	errata,	we	make	judgments	with	respect	to	the	return	rates	to	our	customers,	our customers'	return	rates,	and	the	costs	to	repair	or	replace	parts.	At	least	quarterly,	we	review	the	status	of	each	significant	matter,	and	we	may	revise	our estimates.	These	revisions	could	have	a	material	impact	on	our	results	of	operations	and	financial	position.

# Accounting	Changes

For	a	description	of	accounting	changes,	see	" Note	3:	Accounting	Changes"	in	Part	II,	Item	8	of	this	Form	10-K.

# Results	of	Operations

Certain	consolidated	statements	of	income	data	as	a	percentage	of	net	revenue	for	each	period	were	as	follows:

| (Dollars	in	Millions,	Except	Per	Share	Amounts) | Dollars | %	of	Net<br>Revenue | Dollars | %	of	Net<br>Revenue | Dollars | %	of	Net<br>Revenue |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Net\trevenue | $52,708 | 100.0\t% | $53,341 | 100.0% | $53,999 | 100.0% |
| Cost\tof\tsales | 21,187 | 40.2\t% | 20,190 | 37.9% | 20,242 | 37.5% |
| Gross\tmargin | 31,521 | 59.8\t% | 33,151 | 62.1% | 33,757 | 62.5% |
| Research\tand\tdevelopment | 10,611 | 20.1\t% | 10,148 | 19.0% | 8,350 | 15.4% |
| Marketing,\tgeneral\tand\tadministrative | 8,088 | 15.3\t% | 8,057 | 15.1% | 7,670 | 14.2% |
| Restructuring\tand\tasset\timpairment\tcharges | 240 | 0.5\t% | — | —% | — | —% |
| Amortization\tof\tacquisition-related\tintangibles | 291 | 0.6\t% | 308 | 0.6% | 260 | 0.5% |
| Operating\tincome | 12,291 | 23.3\t% | 14,638 | 27.4% | 17,477 | 32.4% |
| Gains\t(losses)\ton\tequity\tinvestments,\tnet | 471 | 0.9\t% | 141 | 0.3% | 112 | 0.2% |
| Interest\tand\tother,\tnet | (151) | (0.3)% | 94 | 0.2% | 192 | 0.3% |
| Income\tbefore\ttaxes | 12,611 | 23.9\t% | 14,873 | 27.9% | 17,781 | 32.9% |
| Provision\tfor\ttaxes | 2,991 | 5.7\t% | 3,868 | 7.3% | 4,839 | 8.9% |
| Net\tincome | $9,620 | 18.3\t% | $11,005 | 20.6% | $12,942 | 24.0% |
| Diluted\tearnings\tper\tcommon\tshare | $1.89 |  | $2.13 |  | $2.39 |  |

Our	net	revenue	for	2013	decreased	by	$633	million,	or	1%,	compared	to	2012.	The	PCCG	and	DCG	platform	unit	sales	decreased	by	3%.	Additionally, lower	netbook	platform	and	feature	and	entry	phone	component	unit	sales	contributed	to	the	decrease.	These	decreases	were	partially	offset	by	higher PCCG	and	DCG	platform	average	selling	prices,	which	were	up	2%,	as	well	as	higher	ISG	platform	average	selling	prices.

Our	overall	gross	margin	dollars	for	2013	decreased	by	$1.6	billion,	or	5%,	compared	to	2012.	The	decrease	was	due	in	large	part	to	$1.8	billion	of	higher factory	start-up	costs	primarily	for	our	next-generation	14nm	process	technology.	To	a	lesser	extent,	lower	overall	revenue	from	our	Other	IA	operating segments,	primarily	in	our	phone	and	mobile	component	businesses	and	netbook	group,	as	well	as	lower	PCCG	and	DCG	platform	revenue	contributed	to the	decrease.	These	decreases	were	partially	offset	by	higher	ISG	platform	revenue,	approximately	$325	million	of	lower	PCCG	and	DCG	platform	unit costs,	and	$221	million	of	lower	excess	capacity	charges.

Our	overall	gross	margin	percentage	decreased	to	59.8%	in	2013	from	62.1%	in	2012.	The	decrease	in	the	gross	margin	percentage	was	primarily	due	to the	gross	margin	percentage	decrease	in	PCCG.	We	derived	most	of	our	overall	gross	margin	dollars	in	2013	and	2012	from	the	sale	of	platforms	in	the PCCG	and	DCG	operating	segments.

Our	net	revenue	for	2012,	which	included	52	weeks,	decreased	by	$658	million,	or	1%,	compared	to	2011,	which	included	53	weeks.	The	PCCG	and	DCG platform	unit	sales	decreased	1%	while	average	selling	prices	were	unchanged.	Additionally,	lower	netbook	platform	unit	sales	and	Multi-Comm	average selling	prices,	primarily	discrete	modems,	contributed	to	the	decrease.	These	decreases	were	partially	offset	by	our	McAfee	operating	segment,	which	we acquired	in	the	Q1	2011.	McAfee	contributed	$469	million	of	additional	revenue	in	2012	compared	to	2011.

Our	overall	gross	margin	dollars	for	2012	decreased	by	$606	million,	or	2%,	compared	to	2011.	The	decrease	was	due	in	large	part	to	$494	million	of excess	capacity	charges,	as	well	as	lower	revenue	from	the	PCCG	and	DCG	platform.	To	a	lesser	extent,	approximately	$390	million	of	higher	unit	costs on	the	PCCG	and	DCG	platform	as	well	as	lower	netbook	and	Multi-Comm	revenue	contributed	to	the	decrease.	The	decrease	was	partially	offset	by	$643 million	of	lower	factory	start-up	costs	as	we	transition	from	our	22nm	process	technology	to	R&D	of	our	next-generation	14nm	process	technology,	as	well as	$422	million	of	charges	recorded	in	2011	to	repair	and	replace	materials	and	systems	impacted	by	a	design	issue	related	to	our	Intel®	6	Series	Express Chipset	family.	The	decrease	was	also	partially	offset	by	the	two	additional	months	of	results	from	our	acquisition	of	McAfee,	which	occurred	on February	28,	2011,	contributing	approximately	$334	million	of	additional	gross	margin	dollars	in	2012	compared	to	2011.	The	amortization	of	acquisition- related	intangibles	resulted	in	a	$557	million	reduction	to	our	overall	gross	margin	dollars	in	2012,	compared	to	$482	million	in	2011,	primarily	due	to acquisitions	completed	in	Q1	2011.

Our	overall	gross	margin	percentage	in	2012	was	flat	from	2011	as	higher	excess	capacity	charges	and	higher	unit	costs	on	the	PCCG	and	DCG	platform were	offset	by	lower	factory	start-up	costs	and	no	impact	in	2012	for	a	design	issue	related	to	our	Intel	6	Series	Express	Chipset	family.	We	derived	a substantial	majority	of	our	overall	gross	margin	dollars	in	2012	and	2011	from	the	sale	of	platforms	in	the	PCCG	and	DCG	operating	segments.

# PC	Client	Group

The	revenue	and	operating	income	for	the	PCCG	operating	segment	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Net\trevenue | $33,039 | $34,504 | $35,624 |
| Operating\tincome | $11,827 | $13,106 | $14,840 |

Net	revenue	for	the	PCCG	operating	segment	decreased	by	$1.5	billion,	or	4%,	in	2013	compared	to	2012.	PCCG	platform	unit	sales	were	down	3% primarily	on	softness	in	traditional	PC	demand	during	the	first	nine	months	of	the	year.	The	decrease	in	revenue	was	driven	by	lower	notebook	and desktop	platform	unit	sales	which	were	down	4%	and	2%,	respectively.	PCCG	platform	average	selling	prices	were	flat,	with	6%	higher	desktop	platform average	selling	prices	offset	by	4%	lower	notebook	platform	average	selling	prices.

Operating	income	decreased	by	$1.3	billion,	or	10%,	in	2013	compared	to	2012,	which	was	driven	by	$1.5	billion	of	lower	gross	margin,	partially	offset	by $200	million	of	lower	operating	expenses.	The	decrease	in	gross	margin	was	driven	by	$1.5	billion	of	higher	factory	start-up	costs	primarily	on	our	next- generation	14nm	process	technology	as	well	as	lower	PCCG	platform	revenue.	These	decreases	were	partially	offset	by	approximately	$520	million	of lower	PCCG	platform	unit	costs,	$260	million	of	lower	excess	capacity	charges,	and	higher	sell-through	of	previously	non-qualified	units.

Net	revenue	for	the	PCCG	operating	segment	decreased	by	$1.1	billion,	or	3%,	in	2012	compared	to	2011.	PCCG	revenue	was	negatively	impacted	by the	growth	of	tablets	as	these	devices	compete	with	PCs	for	consumer	sales.	Platform	average	selling	prices	and	unit	sales	decreased	2%	and	1%, respectively.	The	decrease	was	driven	by	6%	lower	notebook	platform	average	selling	prices	and	5%	lower	desktop	platform	unit	sales.	These	decreases were	partially	offset	by	a	4%	increase	in	desktop	platform	average	selling	prices	and	a	2%	increase	in	notebook	platform	unit	sales.

Operating	income	decreased	by	$1.7	billion,	or	12%,	in	2012	compared	to	2011	driven	by	$644	million	of	lower	gross	margin	and	$1.1	billion	of	higher operating	expenses.	The	decrease	in	gross	margin	was	primarily	due	to	lower	platform	revenue.	Additionally,	$457	million	of	higher	excess	capacity charges	and	approximately	$350	million	of	higher	platform	unit	costs	contributed	to	the	decrease.	These	decreases	were	partially	offset	by	$785	million	of lower	factory	start-up	costs	as	we	transition	from	manufacturing	start-up	costs	related	to	our	22nm	process	technology	to	R&D	of	our	next-generation	14nm process	technology.	Additionally,	the	first	half	of	2011	included	$422	million	of	charges	recorded	to	repair	and	replace	materials	and	systems	impacted	by the	design	issue	related	to	our	Intel	6	Series	Express	Chipset	family.

# Data	Center	Group

The	revenue	and	operating	income	for	the	DCG	operating	segment	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Net\trevenue | $11,238 | $10,511 | $9,911 |
| Operating\tincome | $5,164 | $5,020 | $5,053 |

Net	revenue	for	the	DCG	operating	segment	increased	by	$727	million,	or	7%,	in	2013	compared	to	2012.	DCG	platform	average	selling	prices	and	unit sales	were	up	4%	and	3%,	respectively.	Our	platform	unit	sales	continued	to	benefit	from	growth	in	the	Internet	cloud	computing	and	high	performance computing	market	segments.

Operating	income	increased	$144	million,	or	3%,	in	2013	compared	to	2012	with	$148	million	of	higher	gross	margin	offset	by	higher	operating	expenses. Gross	margin	was	positively	impacted	by	higher	platform	revenue,	partially	offset	by	$274	million	of	higher	factory	start-up	costs	for	our	next-generation 14nm	process	technology,	and	approximately	$190	million	of	higher	DCG	platform	unit	costs.

Net	revenue	for	the	DCG	operating	segment	increased	by	$600	million,	or	6%,	in	2012	compared	to	2011.	The	increase	in	revenue	was	due	to	6%	higher platform	average	selling	prices,	slightly	offset	by	1%	lower	platform	unit	sales.	Our	platform	average	selling	prices	benefited	from	significant	growth	in	the Internet	cloud	computing	and	high	performance	computing	market	segments.	This	was	offset	by	weakness	in	the	enterprise	server	market	segment.

Operating	income	decreased	by	$33	million	in	2012	compared	to	2011	as	$356	million	of	higher	gross	margin	was	more	than	offset	by	$389	million	of higher	operating	expenses.	The	increase	in	gross	margin	was	primarily	due	to	higher	platform	revenue.

# Other	Intel	Architecture	Operating	Segments

The	revenue	and	operating	income	(loss)	for	the	other	Intel	architecture	operating	segments,	including	ISG,	Multi-Comm,	the	Tablet	Group,	the	Phone Group,	the	Service	Provider	Group,	the	Netbook	Group,	and	the	New	Devices	Group	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Net\trevenue | $4,092 | $4,378 | $5,005 |
| Operating\tincome\t(loss) | $(2,445) | $(1,377) | $(577) |

Net	revenue	for	the	Other	IA	operating	segments	decreased	by	$286	million,	or	7%,	in	2013	compared	to	2012.	The	decrease	was	primarily	due	to	lower netbook	platform,	feature	and	entry	phone	components,	and	Multi-Comm	unit	sales.	To	a	lesser	extent,	lower	Multi-Comm	average	selling	prices contributed	to	the	decrease.	These	decreases	were	partially	offset	by	higher	ISG	revenue	on	increased	platform	average	selling	prices.

Operating	results	for	the	Other	IA	operating	segments	decreased	by	$1.1	billion	in	2013	compared	to	2012.	The	decline	in	operating	results	was	primarily due	to	approximately	$590	million	of	higher	operating	expenses	in	the	Other	IA	operating	segments	on	R&D	investments	in	our	smartphone	and	tablet products	as	well	as	higher	cost	of	sales	as	we	ramp	our	tablet	business.	Additionally,	lower	netbook	platform	and	Multi-Comm	revenue	contributed	to	the decrease.	These	decreases	were	partially	offset	by	higher	ISG	revenue.

Net	revenue	for	the	Other	IA	operating	segments	decreased	by	$627	million,	or	13%,	in	2012	compared	to	2011.	The	decrease	was	primarily	due	to	lower netbook	platform	unit	sales	and	lower	Multi-Comm	average	selling	prices.	To	a	lesser	extent,	lower	netbook	platform	average	selling	prices	contributed	to the	decrease.	These	decreases	were	partially	offset	by	higher	ISG	platform	average	selling	prices.

Operating	results	for	the	Other	IA	operating	segments	decreased	by	$800	million	from	an	operating	loss	of	$577	million	in	2011	to	an	operating	loss	of $1.4	billion	in	2012.	The	decline	in	operating	results	was	primarily	due	to	lower	netbook	revenue	and	higher	operating	expenses	in	the	Other	IA	operating segments.	To	a	lesser	extent,	lower	Multi-Comm	revenue	contributed	to	the	decrease.

# Software	and	Services	Operating	Segments

The	revenue	and	operating	income	(loss)	for	the	SSG	operating	segments,	including	McAfee,	the	Wind	River	Software	Group,	and	the	Software	and Services	Group,	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Net\trevenue | $2,502 | $2,381 | $1,870 |
| Operating\tincome\t(loss) | $1 | $(11) | $(32) |

Net	revenue	for	the	SSG	operating	segments	increased	by	$121	million	in	2013	compared	to	2012.	The	increase	was	primarily	driven	by	higher	McAfee revenue.

The	operating	results	for	the	SSG	operating	segments	increased	by	$12	million	in	2013	compared	to	2012.	The	increase	was	primarily	driven	by	higher McAfee	revenue,	partially	offset	by	higher	McAfee	operating	expenses.

Net	revenue	for	the	SSG	operating	segments	increased	by	$511	million	in	2012	compared	to	2011.	The	increase	was	primarily	due	to	two	months	of incremental	revenue	from	McAfee	of	$469	million.	McAfee	was	acquired	on	February	28,	2011.

The	operating	results	for	the	SSG	operating	segments	increased	by	$21	million	in	2012	compared	to	2011.	The	increase	was	primarily	due	to	higher McAfee	revenue,	partially	offset	by	higher	McAfee	operating	expenses.

# Operating	Expenses

Operating	expenses	for	each	period	were	as	follows:

| (Dollars	In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Research\tand\tdevelopment\t(R&amp;D) | $10,611 | $10,148 | $8,350 |
| Marketing,\tgeneral\tand\tadministrative\t(MG&amp;A) | $8,088 | $8,057 | $7,670 |
| R&amp;D\tand\tMG&amp;A\tas\tpercentage\tof\tnet\trevenue | 35% | 34% | 30% |
| Restructuring\tand\tasset\timpairment\tcharges | $240 | $— | $— |
| Amortization\tof\tacquisition-related\tintangibles | $291 | $308 | $260 |

Research	and	Development.	R&D	spending	increased	by	$463	million,	or	5%,	in	2013	compared	to	2012.	The	increase	was	driven	by	higher	investments in	our	products,	primarily	smartphones	and	tablets,	as	well	higher	compensation	expenses	due	to	annual	salary	increases.	This	increase	was	partially offset	by	lower	process	development	costs	as	we	transitioned	from	R&D	to	manufacturing	for	our	14nm	process	technology.

R&D	spending	increased	by	$1.8	billion,	or	22%,	in	2012	compared	to	2011.	The	increase	was	driven	by	investments	in	our	products	for	smartphones, tablets,	Ultrabook	devices,	and	data	centers.	Additionally,	R&D	spending	increased	due	to	higher	process	development	costs	for	our	14nm	process technology,	higher	compensation	expenses	mainly	due	to	annual	salary	increases,	additional	expenses	for	acquisitions	made	in	Q1	2011,	and	higher costs	related	to	the	development	of	450mm	wafer	technology.

Marketing,	General	and	Administrative.	MG&A	expenses	increased	by	$31	million	in	2013	compared	to	2012,	and	increased	by	$387	million,	or	5%,	in 2012	compared	to	2011.	The	increase	in	2012	compared	to	2011	was	primarily	due	to	two	additional	months	of	McAfee	expenses	in	2012	and	higher compensation	expenses,	due	to	annual	salary	increases	as	well	as	an	increase	in	the	number	of	employees.

Restructuring	and	Asset	Impairment	Charges.	In	response	to	the	current	business	environment,	during	2013,	management	approved	several	restructuring actions	including	targeted	workforce	reductions	as	well	as	exit	of	certain	businesses	and	facilities.	These	actions	include	the	wind	down	of	our	200mm wafer	fabrication	facility	in	Massachusetts,	which	we	expect	to	cease	production	by	the	end	of	2014.	These	targeted	reductions	will	enable	the	company	to better	align	our	resources	in	areas	providing	the	greatest	benefit	in	the	changing	market.

Restructuring	and	asset	impairment	charges	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Employee\tseverance\tand\tbenefit\tarrangements | $201 | $— | $— |
| Asset\timpairments | 39 | — | — |
| Total\trestructuring\tand\tasset\timpairment\tcharges | $240 | $— | $— |

The	restructuring	and	asset	impairment	activity	for	2013	was	as	follows:

| (In	Millions) | Employee	Severance<br>and	Benefits | Asset	Impairments | Total |
| :--- | :--- | :--- | :--- |
| Accrued\trestructuring\tbalance\tas\tof\tDecember\t29,\t2012 | $— | $— | $— |
| Additional\taccruals | 195 | 39 | 234 |
| Adjustments | 6 | — | 6 |
| Cash\tpayments | (18) | — | (18) |
| Non-cash\tsettlements | — | (39) | (39) |
| Accrued\trestructuring\tbalance\tas\tof\tDecember\t28,\t2013 | $183 | $— | $183 |

We	recorded	the	additional	accruals	and	adjustments	as	restructuring	and	asset	impairment	charges	in	the	consolidated	statements	of	income	within	the "all	other"	operating	segment.	The	charges	incurred	during	2013	include	$201	million	related	to	employee	severance	and	benefit	arrangements,	which impacted	approximately	3,900	employees.	The	accrued	restructuring	balance	as	of	December	28,	2013,	relates	to	employee	severance	and	benefits which	are	expected	to	be	paid	within	the	next	12	months	and	was	recorded	as	a	current	liability	within	accrued	compensation	and	benefits	in	the consolidated	balance	sheets.

We	estimate	that	employee	severance	and	benefit	charges	to	date	will	result	in	gross	annual	savings	of	approximately	 $400	million,	which	will	be	realized within	R&D,	cost	of	sales,	and	MG&A.	We	began	to	realize	these	savings	in	Q4	2013	and	expect	to	fully	realize	these	savings	by	Q1	2015.

We	may	incur	additional	charges	in	the	future	for	employee	severance	and	benefit	arrangements,	as	well	as	facility-related	or	other	exit	activities,	as	we continue	to	align	our	resources	to	meet	the	needs	of	the	business.

Amortization	of	Acquisition-Related	Intangibles.	Amortization	of	acquisition-related	intangibles	decreased	by	$17	million,	or	6%,	in	2013	compared	to	2012 and	increased	by	$48	million,	or	18%,	in	2012	compared	to	2011.	The	increase	in	2012	compared	to	2011	was	primarily	due	to	the	full	year	of amortization	of	intangibles	in	2012	related	to	the	acquisitions	of	McAfee	and	the	WLS	business	of	Infineon,	both	completed	in	Q1	2011.	For	further information,	see	"Note	8:	Acquisitions"	and	"Note	11:	Identified	Intangible	Assets"	in	Part	II,	Item	8	of	this	Form	10-K.

# Share-Based	Compensation

Share-based	compensation	totaled	$1.1	billion	in	2013	($1.1	billion	in	2012	and	$1.1	billion	in	2011).	Share-based	compensation	was	included	in	cost	of sales	and	operating	expenses.

As	of	December	28,	2013,	unrecognized	share-based	compensation	costs	and	the	weighted	average	periods	over	which	the	costs	are	expected	to	be recognized	were	as	follows:

| (Dollars	in	Millions) | Share-Based<br>Compensation<br>Costs | Weighted<br>Average<br>Period |
| :--- | :--- | :--- |
| Stock\toptions | $75 | 1.1\tyears |
| Restricted\tstock\tunits | $1,625 | 1.2\tyears |

As	of	December	28,	2013,	there	was	$13	million	in	unrecognized	share-based	compensation	costs	related	to	the	rights	to	acquire	common	stock	under	our stock	purchase	plan.	We	expect	to	recognize	those	costs	over	a	period	of	approximately	one	and	a	half	months.

# Gains	(Losses)	on	Equity	Investments	and	Interest	and	Other

Gains	(losses)	on	equity	investments,	net	and	interest	and	other,	net	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Gains\t(losses)\ton\tequity\tinvestments,\tnet | $471 | $141 | $112 |
| Interest\tand\tother,\tnet | $(151) | $94 | $192 |

We	recognized	higher	net	gains	on	equity	investments	in	2013	compared	to	2012	due	to	higher	gains	on	sales	of	equity	investments,	partially	offset	by lower	gains	on	third-party	merger	transactions.	Net	gains	on	equity	investments	were	higher	in	2012	compared	to	2011	due	to	lower	equity	method	losses and	higher	gains	on	third-party	merger	transactions,	partially	offset	by	lower	gains	on	sales	of	equity	investments.

Net	gains	on	equity	investments	for	2013	included	gains	of	 $439	million	on	the	sales	of	our	interest	in	Clearwire	Communications,	LLC	(Clearwire	LLC) and	our	shares	in	Clearwire	Corporation	in	Q3	2013.	For	further	information	on	these	transactions,	see	"Note	5:	Cash	and	Investments"	in	Part	II,	Item	8	of this	Form	10-K.	Net	gains	on	equity	investments	for	2011	included	a	gain	of	$150	million	on	the	sale	of	shares	in	VMware,	Inc.	Our	share	of	equity	method investee	losses	recognized	in	2011	was	primarily	related	to	Clearwire	LLC	($145	million)	and	these	losses	reduced	our	carrying	value	in	Clearwire	LLC	to zero.

We	recognized	an	interest	and	other	net	loss	in	2013	compared	to	a	net	gain	in	2012.	We	recognized	a	net	loss	in	2013	due	to	an	increase	in	interest expense	related	to	the	issuance	of	our	$6.2	billion	aggregate	principal	amount	of	senior	unsecured	notes	in	Q4	2012.	Additionally,	in	Q2	2012	we	received proceeds	from	an	insurance	claim	related	to	the	floods	in	Thailand.

Interest	and	other,	net	decreased	in	2012	compared	to	2011,	primarily	due	to	a	 $164	million	gain	recognized	upon	formation	of	the	Intel-GE	Care Innovations,	LLC	(Care	Innovations)	joint	venture	in	Q1	2011	and	higher	interest	expense	in	2012.

# Provision	for	Taxes

Our	provision	for	taxes	and	effective	tax	rate	for	each	period	were	as	follows:

| (Dollars	in	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Income\tbefore\ttaxes | $12,611 | $14,873 | $17,781 |
| Provision\tfor\ttaxes | $2,991 | $3,868 | $4,839 |
| Effective\ttax\trate | 23.7% | 26.0% | 27.2% |

The	U.S.	R&D	tax	credit	was	reenacted	in	January	2013	retroactive	to	the	beginning	of	2012.	The	majority	of	the	decrease	in	our	effective	tax	rate	was driven	by	the	recognition	of	the	2012	U.S	R&D	tax	credit	in	Q1	2013.	The	effective	tax	rate	was	also	positively	impacted	by	the	recognition	of	the	2013 impact	of	the	U.S.	R&D	tax	credit,	partially	offset	by	a	lower	percentage	of	our	profits	generated	in	lower	tax	jurisdictions	in	2013	compared	to	2012.

We	generated	a	higher	percentage	of	our	profits	from	lower	tax	jurisdictions	in	 2012	compared	to	2011,	positively	impacting	our	effective	tax	rate	for	2012. This	impact	was	partially	offset	by	the	U.S.	R&D	tax	credit	that	was	not	reinstated	during	2012.

# Liquidity	and	Capital	Resources

| (Dollars	in	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 |
| :--- | :--- | :--- |
| Cash\tand\tcash\tequivalents,\tshort-term\tinvestments,\tand\tmarketable\tdebt\tinstruments\tincluded\tin\ttrading\nassets | $20,087 | $18,162 |
| Other\tlong-term\tinvestments,\tand\treverse\trepurchase\tagreements\twith\toriginal\tmaturities\tgreater\tthan\napproximately\tthree\tmonths | $1,873 | $543 |
| Short-term\tand\tlong-term\tdebt | $13,446 | $13,448 |
| Debt\tas\tpercentage\tof\tstockholders'\tequity | 23.1% | 26.3% |

# Sources	and	Uses	of	Cash

# (In	Millions)

In	summary,	our	cash	flows	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby\toperating\tactivities | $20,776 | $18,884 | $20,963 |
| Net\tcash\tused\tfor\tinvesting\tactivities | (18,073) | (14,060) | (10,301) |
| Net\tcash\tused\tfor\tfinancing\tactivities | (5,498) | (1,408) | (11,100) |
| Effect\tof\texchange\trate\tfluctuations\ton\tcash\tand\tcash\tequivalents | (9) | (3) | 5 |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | $(2,804) | $3,413 | $(433) |

# Operating	Activities

Cash	provided	by	operating	activities	is	net	income	adjusted	for	certain	non-cash	items	and	changes	in	certain	assets	and	liabilities.

For	2013	compared	to	2012,	the	$1.9	billion	increase	in	cash	provided	by	operating	activities	was	due	to	changes	in	working	capital,	partially	offset	by lower	net	income	in	2013.	Income	taxes	paid,	net	of	refunds,	in	2013	compared	to	2012	were	$1.1	billion	lower	due	to	lower	income	before	taxes	in	2013 and	2012	income	tax	overpayments.

Changes	in	assets	and	liabilities	as	of	 December	28,	2013,	compared	to	December	29,	2012,	included	lower	income	taxes	payable	and	receivable resulting	from	a	reduction	in	taxes	due	in	2013,	and	lower	inventories	due	to	the	sell-through	of	older-generation	products,	partially	offset	by	the	ramp	of 4th	generation	Intel	Core	Processor	family	products.

For	2012	compared	to	2011,	the	$2.1	billion	decrease	in	cash	provided	by	operating	activities	was	due	to	lower	net	income	and	changes	in	our	working capital,	partially	offset	by	adjustments	for	non-cash	items.	The	adjustments	for	noncash	items	were	higher	due	primarily	to	higher	depreciation	in	2012 compared	to	2011,	partially	offset	by	increases	in	non-acquisition-related	deferred	tax	liabilities	as	of	December	31,	2011.

# Investing	Activities

Investing	cash	flows	consist	primarily	of	capital	expenditures;	investment	purchases,	sales,	maturities,	and	disposals;	as	well	as	cash	used	for acquisitions.

The	increase	in	cash	used	for	investing	activities	in	2013	compared	to	2012	was	primarily	due	to	an	increase	in	purchases	of	available-for-sale investments	and	a	decrease	in	maturities	and	sales	of	trading	assets,	partially	offset	by	an	increase	in	maturities	and	sales	of	available-for-sale investments	and	a	decrease	in	purchases	of	licensed	technology	and	patents.	Our	capital	expenditures	were	$10.7	billion	in	2013	($11.0	billion	in	2012 and	$10.8	billion	in	2011).

Cash	used	for	investing	activities	increased	in	2012	compared	to	2011	primarily	due	to	net	purchases	of	available-for-sale	investments	and	trading	assets in	2012,	as	compared	to	net	maturities	and	sales	of	available-for-sale	investments	and	trading	assets	in	2011,	partially	offset	by	a	decrease	in	cash	paid for	acquisitions.	Net	purchases	of	available-for-sale	investments	in	2012	included	our	purchase	of	$3.2	billion	of	equity	securities	in	ASML	in	Q3	2012.

# Financing	Activities

Financing	cash	flows	consist	primarily	of	repurchases	of	common	stock,	payment	of	dividends	to	stockholders,	issuance	and	repayment	of	long-term	debt, and	proceeds	from	the	sale	of	shares	through	employee	equity	incentive	plans.

The	increase	in	cash	used	for	financing	activities	in	2013	compared	to	2012	was	primarily	due	to	the	issuance	of	long-term	debt	in	2012	and	fewer repurchases	of	common	stock	under	our	authorized	common	stock	repurchase	program	in	2013.	We	have	an	ongoing	authorization,	originally	approved by	our	Board	of	Directors	in	October	2005,	and	subsequently	amended,	to	repurchase	up	to	$45	billion	in	shares	of	our	common	stock	in	the	open	market or	negotiated	transactions.	During	2013,	we	repurchased	$2.1	billion	of	common	stock	under	our	authorized	common	stock	repurchase	program compared	to	$4.8	billion	in	2012.	As	of	December	28,	2013,	$3.2	billion	remained	available	for	repurchase	under	the	existing	repurchase	authorization limit.	We	base	our	level	of	common	stock	repurchases	on	internal	cash	management	decisions,	and	this	level	may	fluctuate.	Proceeds	from	the	sale	of shares	through	employee	equity	incentive	plans	totaled	$1.6	billion	in	2013	compared	to	$2.1	billion	in	2012.	Our	total	dividend	payments	were	 $4.5	billion in	2013	compared	to	$4.4	billion	in	2012.	We	have	paid	a	cash	dividend	in	each	of	the	past	 85	quarters.	In	January	2014,	our	Board	of	Directors	declared a	cash	dividend	of	$0.225	per	common	share	for	Q1	2014.	The	dividend	is	payable	on	March	1,	2014	to	stockholders	of	record	on	February	7,	2014.

The	decrease	in	cash	used	for	financing	activities	in	2012	compared	to	2011,	was	primarily	due	to	fewer	repurchases	of	common	stock	under	our authorized	common	stock	repurchase	program	and,	to	a	lesser	extent,	the	issuance	of	a	higher	amount	of	long-term	debt	in	2012	compared	to	2011.

# Liquidity

Cash	generated	by	operations	is	our	primary	source	of	liquidity.	We	maintain	a	diverse	investment	portfolio	that	we	continually	analyze	based	on	issuer, industry,	and	country.	As	of	December	28,	2013,	cash	and	cash	equivalents,	short-term	investments,	and	marketable	debt	instruments	included	in	trading assets	totaled	$20.1	billion	($18.2	billion	as	of	December	29,	2012).	In	addition	to	the	$20.1	billion,	we	have	$1.9	billion	in	other	long-term	investments, and	reverse	repurchase	agreements	with	original	maturities	greater	than	approximately	three	months	that	we	include	when	assessing	our	sources	of liquidity.	Most	of	our	investments	in	debt	instruments	are	in	 A/A2	or	better	rated	issuances,	and	the	majority	of	the	issuances	are	rated	 AA-/Aa3	or	better.

Our	commercial	paper	program	provides	another	potential	source	of	liquidity.	We	have	an	ongoing	authorization	from	our	Board	of	Directors	to	borrow	up to	$3.0	billion,	including	through	the	issuance	of	commercial	paper.	Maximum	borrowings	under	our	commercial	paper	program	during	 2013	were	$300 million,	although	no	commercial	paper	remained	outstanding	as	of	 December	28,	2013.	Our	commercial	paper	was	rated	 A-1+	by	Standard	&	Poor's	and P-1	by	Moody's	as	of	December	28,	2013.	We	also	have	an	automatic	shelf	registration	statement	on	file	with	the	SEC,	pursuant	to	which	we	may	offer	an unspecified	amount	of	debt,	equity,	and	other	securities.	In	2012,	we	utilized	this	shelf	registration	statement	and	issued	$6.2	billion	aggregate	principal amount	of	senior	unsecured	notes.	The	proceeds	from	the	sale	of	these	notes	were	used	for	general	corporate	purposes	and	to	repurchase	shares	of	our common	stock	pursuant	to	our	authorized	common	stock	repurchase	program.	For	further	information	on	the	terms	of	the	notes,	see	"Note	16: Borrowings"	in	Part	II,	Item	8	of	this	Form	10-K.

As	of	December	28,	2013,	$11.3	billion	of	our	cash	and	cash	equivalents,	short-term	investments,	and	marketable	debt	instruments	included	in	trading assets	was	held	by	our	non-U.S.	subsidiaries.	Of	the	$11.3	billion	held	by	our	non-U.S.	subsidiaries,	approximately	 $2.1	billion	was	available	for	use	in	the U.S.	without	incurring	additional	U.S.	income	taxes	in	excess	of	the	amounts	already	accrued	in	our	financial	statements	as	of	December	28,	2013.	The remaining	amount	of	non-U.S.	cash	and	cash	equivalents,	short-term	investments,	and	marketable	debt	instruments	included	in	trading	assets	has	been indefinitely	reinvested	and,	therefore,	no	U.S.	current	or	deferred	taxes	have	been	accrued	and	this	amount	is	earmarked	for	near-term	investment	in	our operations	outside	the	U.S.	and	future	acquisitions	of	non-U.S.	entities.	We	believe	our	U.S.	sources	of	cash	and	liquidity	are	sufficient	to	meet	our business	needs	in	the	U.S.	and	do	not	expect	that	we	will	need	to	repatriate	the	funds	we	have	designated	as	indefinitely	reinvested	outside	the	U.S. Under	current	tax	laws,	should	our	plans	change	and	we	were	to	choose	to	repatriate	some	or	all	of	the	funds	we	have	designated	as	indefinitely reinvested	outside	the	U.S.,	such	amounts	would	be	subject	to	U.S.	income	taxes	and	applicable	non-U.S.	income	and	withholding	taxes.

We	believe	that	we	have	the	financial	resources	needed	to	meet	business	requirements	for	the	next	12	months,	including	capital	expenditures	for worldwide	manufacturing	and	assembly	and	test;	working	capital	requirements;	and	potential	dividends,	common	stock	repurchases,	acquisitions,	and strategic	investments.

# Fair	Value	of	Financial	Instruments

When	determining	fair	value,	we	consider	the	principal	or	most	advantageous	market	in	which	we	would	transact,	and	we	consider	assumptions,	such	as an	obligor's	credit	risk,	that	market	participants	would	use	when	pricing	the	asset	or	liability.	For	further	information,	see	"Fair	Value"	in	"Note	2:	Accounting Policies"	in	Part	II,	Item	8	of	this	Form	10-K.

# Marketable	Debt	Instruments

As	of	December	28,	2013,	our	assets	measured	and	recorded	at	fair	value	on	a	recurring	basis	included $20.3	billion	of	marketable	debt	instruments.	Of these	instruments,	$7.2	billion	was	classified	as	Level	1,	$13.0	billion	as	Level	2,	and	 $59	million	as	Level	3.

Our	balance	of	marketable	debt	instruments	that	are	measured	and	recorded	at	fair	value	on	a	recurring	basis	and	classified	as	Level	1	was	classified	as such	due	to	the	use	of	observable	market	prices	for	identical	securities	that	are	traded	in	active	markets.	We	evaluate	security-specific	market	data	when determining	whether	the	market	for	a	debt	security	is	active.

Of	the	$13.0	billion	of	marketable	debt	instruments	measured	and	recorded	at	fair	value	on	a	recurring	basis	and	classified	as	Level	2,	approximately 60% was	classified	as	Level	2	due	to	the	use	of	a	discounted	cash	flow	model,	and	approximately	40%	was	classified	as	such	due	to	the	use	of	non-binding market	consensus	prices	that	were	corroborated	with	observable	market	data.

Our	marketable	debt	instruments	that	are	measured	and	recorded	at	fair	value	on	a	recurring	basis	and	classified	as	Level	3,	are	 classified	as	such because	the	fair	values	are	generally	derived	from	discounted	cash	flow	models,	performed	either	by	us	or	our	pricing	providers,	using	inputs	that	we	are unable	to	corroborate	with	observable	market	data.	We	monitor	and	review	the	inputs	and	results	of	these	valuation	models	to	ensure	the	fair	value measurements	are	reasonable	and	consistent	with	market	experience	in	similar	asset	classes.

# Loans	Receivable	and	Reverse	Repurchase	Agreements

As	of	December	28,	2013,	our	assets	measured	and	recorded	at	fair	value	on	a	recurring	basis	included	 $805	million	of	loans	receivable	and	$400	million of	reverse	repurchase	agreements.	All	of	these	investments	were	classified	as	Level	2,	as	the	fair	value	is	determined	using	a	discounted	cash	flow	model with	all	significant	inputs	derived	from	or	corroborated	with	observable	market	data.

# Marketable	Equity	Securities

As	of	December	28,	2013,	our	assets	measured	and	recorded	at	fair	value	on	a	recurring	basis	included	 $6.2	billion	of	marketable	equity	securities.	All	of these	securities	were	classified	as	Level	1	because	the	valuations	were	based	on	quoted	prices	for	identical	securities	in	active	markets.	Our	assessment of	an	active	market	for	our	marketable	equity	securities	generally	takes	into	consideration	the	number	of	days	that	each	individual	equity	security	trades over	a	specified	period.

# Contractual	Obligations

The	following	table	summarizes	our	significant	contractual	obligations	as	of	 December	28,	2013:

|  |  | Less	Than |  |  | More	Than |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Total | 1\tYear | 1–3\tYears | 3–5\tYears | 5\tYears |
| Operating\tlease\tobligations | $870 | $208 | $298 | $166 | $198 |
| Capital\tpurchase\tobligations1 | 5,503 | 5,375 | 125 | — | 3 |
| Other\tpurchase\tobligations\tand\tcommitments2 | 1,859 | 772 | 744 | 307 | 36 |
| Long-term\tdebt\tobligations3 | 22,372 | 429 | 2,360 | 3,761 | 15,822 |
| Other\tlong-term\tliabilities4,\t5 | 1,496 | 569 | 663 | 144 | 120 |
| Total6 | $32,100 | $7,353 | $4,190 | $4,378 | $16,179 |

1	 Capital	purchase	obligations	represent	commitments	for	the	construction	or	purchase	of	property,	plant	and	equipment.	They	were	not	recorded	as liabilities	on	our	consolidated	balance	sheets	as	of	December	28,	2013,	as	we	had	not	yet	received	the	related	goods	or	taken	title	to	the	property.

2	 Other	purchase	obligations	and	commitments	include	payments	due	under	various	types	of	licenses	and	agreements	to	purchase	goods	or	services, as	well	as	payments	due	under	non-contingent	funding	obligations.	Funding	obligations	include	agreements	to	fund	various	projects	with	other companies.

3	 Amounts	represent	principal	and	interest	cash	payments	over	the	life	of	the	debt	obligations,	including	anticipated	interest	payments	that	are	not recorded	on	our	consolidated	balance	sheets.	Any	future	settlement	of	convertible	debt	would	impact	our	cash	payments.

4	 We	are	unable	to	reliably	estimate	the	timing	of	future	payments	related	to	uncertain	tax	positions;	therefore,	 $188	million	of	long-term	income	taxes payable	has	been	excluded	from	the	preceding	table.	However,	long-term	income	taxes	payable,	recorded	on	our	consolidated	balance	sheets,

included	these	uncertain	tax	positions,	reduced	by	the	associated	federal	deduction	for	state	taxes	and	U.S.	tax	credits	arising	from	non-U.S. income	taxes.

5	 Amounts	represent	future	cash	payments	to	satisfy	other	long-term	liabilities	recorded	on	our	consolidated	balance	sheets,	including	the	short-term portion	of	these	long-term	liabilities.	Expected	required	contributions	to	our	U.S.	and	non-U.S.	pension	plans	and	other	postretirement	benefit	plans of	$62	million	to	be	made	during	2014	are	also	included;	however,	funding	projections	beyond	 2014	are	not	practicable	to	estimate.

6	 Total	excludes	contractual	obligations	already	recorded	on	our	consolidated	balance	sheets	as	current	liabilities	except	for	the	short-term	portions	of long-term	debt	obligations	and	other	long-term	liabilities.

Contractual	obligations	for	purchases	of	goods	or	services,	included	in	other	purchase	obligations	and	commitments	in	the	preceding	table,	include agreements	that	are	enforceable	and	legally	binding	on	Intel	and	that	specify	all	significant	terms,	including	fixed	or	minimum	quantities	to	be	purchased; fixed,	minimum,	or	variable	price	provisions;	and	the	approximate	timing	of	the	transaction.	For	obligations	with	cancellation	provisions,	the	amounts included	in	the	preceding	table	were	limited	to	the	non-cancelable	portion	of	the	agreement	terms	or	the	minimum	cancellation	fee.

We	have	entered	into	certain	agreements	for	the	purchase	of	raw	materials	that	specify	minimum	prices	and	quantities	based	on	a	percentage	of	the	total available	market	or	based	on	a	percentage	of	our	future	purchasing	requirements.	Due	to	the	uncertainty	of	the	future	market	and	our	future	purchasing requirements,	as	well	as	the	non-binding	nature	of	these	agreements,	obligations	under	these	agreements	are	not	included	in	the	preceding	table.	Our purchase	orders	for	other	products	are	based	on	our	current	manufacturing	needs	and	are	fulfilled	by	our	vendors	within	short	time	horizons.	In	addition, some	of	our	purchase	orders	represent	authorizations	to	purchase	rather	than	binding	agreements.

Contractual	obligations	that	are	contingent	upon	the	achievement	of	certain	milestones	are	not	included	in	the	preceding	table.	These	obligations	include milestone-based	co-marketing	agreements,	contingent	funding/payment	obligations,	and	milestone-based	equity	investment	funding.	These	arrangements are	not	considered	contractual	obligations	until	the	milestone	is	met	by	the	third	party.	During	2012,	we	entered	into	a	series	of	agreements	with	ASML intended	to	accelerate	the	development	of	450mm	wafer	technology	and	EUV	lithography.	Intel	agreed	to	provide	R&D	funding	totaling	 €829	million	over five	years	and	committed	to	advance	purchase	orders	for	a	specified	number	of	tools	from	ASML.	Our	remaining	obligation,	contingent	upon	ASML achieving	certain	milestones,	is	approximately	€738	million,	or	$1.0	billion,	as	of	December	28,	2013.	As	our	obligation	is	contingent	upon	ASML	achieving certain	milestones,	we	have	not	included	this	obligation	in	the	preceding	table.

For	the	majority	of	restricted	stock	units	granted,	the	number	of	shares	issued	on	the	date	the	restricted	stock	units	vest	is	net	of	the	minimum	statutory withholding	requirements	that	we	pay	in	cash	to	the	appropriate	taxing	authorities	on	behalf	of	our	employees.	The	obligation	to	pay	the	relevant	taxing authority	is	not	included	in	the	preceding	table,	as	the	amount	is	contingent	upon	continued	employment.	In	addition,	the	amount	of	the	obligation	is unknown,	as	it	is	based	in	part	on	the	market	price	of	our	common	stock	when	the	awards	vest.

The	expected	timing	of	payments	of	the	obligations	in	the	preceding	table	is	estimated	based	on	current	information.	Timing	of	payments	and	actual amounts	paid	may	be	different,	depending	on	the	time	of	receipt	of	goods	or	services,	or	changes	to	agreed-upon	amounts	for	some	obligations.

# Off-Balance-Sheet	Arrangements

As	of	December	28,	2013,	we	did	not	have	any	significant	off-balance-sheet	arrangements,	as	defined	in	Item	303(a)(4)(ii)	of	SEC	Regulation	S-K.

# ITEM	7A. QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET	RISK

We	are	affected	by	changes	in	non-U.S.	currency	exchange	rates,	interest	rates,	and	equity	prices.	All	of	the	potential	changes	presented	below	are	based on	sensitivity	analyses	performed	on	our	financial	positions	as	of	December	28,	2013,	and	December	29,	2012.	Actual	results	may	differ	materially.

# Currency	Exchange	Rates

In	general,	we	economically	hedge	currency	risks	of	non-U.S.-dollar-denominated	investments	in	debt	instruments	and	loans	receivable	with	currency forward	contracts	or	currency	interest	rate	swaps.	Gains	and	losses	on	these	non-U.S.-currency	investments	are	generally	offset	by	corresponding	losses and	gains	on	the	related	hedging	instruments.

Substantially	all	of	our	revenue	is	transacted	in	U.S.	dollars.	However,	a	significant	amount	of	our	operating	expenditures	and	capital	purchases	is	incurred in	or	exposed	to	other	currencies,	primarily	the	euro,	the	Japanese	yen,	and	the	Israeli	shekel.	We	have	established	balance	sheet	and	forecasted transaction	currency	risk	management	programs	to	protect	against	fluctuations	in	fair	value	and	the	volatility	of	the	functional	currency	equivalent	of	future cash	flows	caused	by	changes	in	exchange	rates.	We	generally	utilize	currency	forward	contracts	in	these	hedging	programs.	 These	programs	reduce,	but do	not	eliminate,	the	impact	of	currency	exchange	movements.	For	further	information,	see	"Risk	Factors"	in	Part	I,	Item	1A	of	this	Form	10-K.	We considered	the	historical	trends	in	currency	exchange	rates	and	determined	that	it	was	reasonably	possible	that	a	weighted	average	adverse	change	of 20%	in	currency	exchange	rates	could	be	experienced	in	the	near	term.	Such	an	adverse	change,	after	taking	into	account	balance	sheet	hedges	only	and offsetting	recorded	monetary	asset	and	liability	positions,	would	have	resulted	in	an	adverse	impact	on	income	before	taxes	of	less	than	$40	million	as	of December	28,	2013	(less	than	$80	million	as	of	December	29,	2012).

# Interest	Rates

We	generally	hedge	interest	rate	risks	of	fixed-rate	debt	instruments	with	interest	rate	swaps.	Gains	and	losses	on	these	investments	are	generally	offset by	corresponding	losses	and	gains	on	the	related	hedging	instruments.

We	are	exposed	to	interest	rate	risk	related	to	our	investment	portfolio	and	indebtedness.	Our	indebtedness	includes	our	debt	issuances	and	the	liability associated	with	a	long-term	patent	cross-license	agreement	with	NVIDIA	Corporation.	The	primary	objective	of	our	investments	in	debt	instruments	is	to preserve	principal	while	maximizing	yields,	which	generally	track	the	U.S.	dollar	three-month	LIBOR.	A	hypothetical	decrease	in	interest	rates	of	up	to 1.0%	would	have	resulted	in	an	increase	in	the	fair	value	of	our	indebtedness	of	approximately	 $1.1	billion	as	of	December	28,	2013	(an	increase	of approximately	$1.5	billion	as	of	December	29,	2012).	A	hypothetical	decrease	in	benchmark	interest	rates	of	up	to	 1.0%,	after	taking	into	account investment	hedges,	would	have	resulted	in	an	increase	in	the	fair	value	of	our	investment	portfolio	of	approximately	$10	million	as	of	December	28,	2013 (an	increase	of	approximately	$10	million	as	of	December	29,	2012).	The	fluctuations	in	fair	value	of	our	investment	portfolio	and	indebtedness	reflect	only the	direct	impact	of	the	change	in	interest	rates.	Other	economic	variables,	such	as	equity	market	fluctuations	and	changes	in	relative	credit	risk,	could result	in	a	significantly	higher	decline	in	the	fair	value	of	our	net	investment	position.	For	further	information	on	how	credit	risk	is	factored	into	the	valuation of	our	investment	portfolio	and	debt	issuances,	see	"Note	4:	Fair	Value"	in	Part	II,	Item	8	of	this	Form	10-K.

# Equity	Prices

Our	investments	include	marketable	equity	securities	and	equity	derivative	instruments.	We	typically	do	not	attempt	to	reduce	or	eliminate	our	equity market	exposure	through	hedging	activities	at	the	inception	of	the	investment.	Before	we	enter	into	hedge	arrangements,	we	evaluate	legal,	market,	and economic	factors,	as	well	as	the	expected	timing	of	disposal	to	determine	whether	hedging	is	appropriate.	Our	equity	market	risk	management	program may	include	equity	derivatives	with	or	without	hedge	accounting	designation	that	utilize	warrants,	equity	options,	or	other	equity	derivatives.

We	also	utilize	total	return	swaps	to	offset	changes	in	liabilities	related	to	the	equity	market	risks	of	certain	deferred	compensation	arrangements.	Gains and	losses	from	changes	in	fair	value	of	these	total	return	swaps	are	generally	offset	by	the	losses	and	gains	on	the	related	liabilities.

As	of	December	28,	2013,	the	fair	value	of	our	marketable	equity	investments	and	our	equity	derivative	instruments,	including	hedging	positions,	was $6.3 billion	($4.4	billion	as	of	December	29,	2012).	Our	marketable	equity	investment	in	ASML	was	carried	at	a	total	fair	market	value	of	 $5.9	billion,	or	94%	of our	marketable	equity	portfolio,	as	of	December	28,	2013.	Our	marketable	equity	method	investments	are	excluded	from	our	analysis,	as	the	carrying value	does	not	fluctuate	based	on	market	price	changes	unless	an	other-than-temporary	impairment	is	deemed	necessary.	To	determine	reasonably possible	decreases	in	the	market	value	of	our	marketable	equity	investments,	we	have	analyzed	the	historical	market	price	sensitivity	of	our	marketable equity	investment	portfolio.	Assuming	a	loss	of	25%	in	market	prices,	and	after	reflecting	the	impact	of	hedges	and	offsetting	positions,	the	aggregate value	of	our	marketable	equity	investments	could	decrease	by	approximately	$1.6	billion,	based	on	the	value	as	of	 December	28,	2013	(a	decrease	in value	of	approximately	$1.6	billion,	based	on	the	value	as	of	 December	29,	2012	using	an	assumed	loss	of	35%).

Many	of	the	same	factors	that	could	result	in	an	adverse	movement	of	equity	market	prices	affect	our	non-marketable	equity	investments,	although	we cannot	always	quantify	the	impact	directly.	Financial	markets	are	volatile,	which	could	negatively	affect	the	prospects	of	the	companies	we	invest	in,	their ability	to	raise	additional	capital,	and	the	likelihood	of	our	ability	to	realize	value	in	our	investments	through	liquidity	events	such	as	initial	public	offerings, mergers,	and	private	sales.	These	types	of	investments	involve	a	great	deal	of	risk,	and	there	can	be	no	assurance	that	any	specific	company	will	grow	or become	successful;	consequently,	we	could	lose	all	or	part	of	our	investment.	Our	non-marketable	equity	investments,	excluding	investments	accounted for	under	the	equity	method,	had	a	carrying	amount	of	$1.3	billion	as	of	December	28,	2013	($1.2	billion	as	of	December	29,	2012).	The	carrying	amount of	our	non-marketable	equity	method	investments	was	$1.0	billion	as	of	December	28,	2013	($1.0	billion	as	of	December	29,	2012).	The	majority	of	our non-marketable	equity	method	investments	balance	as	of	December	28,	2013,	was	concentrated	in	our	IMFT	investment	of	 $646	million	($642	million	as of	December	29,	2012).

# ITEM	8. FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA

# INDEX	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

| Consolidated	Statements	of	Income | 50 |
| :--- | :--- |
| Consolidated\tStatements\tof\tComprehensive\tIncome | 51 |
| Consolidated\tBalance\tSheets | 52 |
| Consolidated\tStatements\tof\tCash\tFlows | 53 |
| Consolidated\tStatements\tof\tStockholders'\tEquity | 54 |
| Notes\tto\tConsolidated\tFinancial\tStatements | 55 |
| Reports\tof\tIndependent\tRegistered\tPublic\tAccounting\tFirm | 107 |
| Supplemental\tData:\tFinancial\tInformation\tby\tQuarter | 109 |

# CONSOLIDATED	STATEMENTS	OF	INCOME

| (In	Millions,	Except	Per	Share	Amounts) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Net\trevenue | $52,708 | $53,341 | $53,999 |
| Cost\tof\tsales | 21,187 | 20,190 | 20,242 |
| Gross\tmargin | 31,521 | 33,151 | 33,757 |
| Research\tand\tdevelopment | 10,611 | 10,148 | 8,350 |
| Marketing,\tgeneral\tand\tadministrative | 8,088 | 8,057 | 7,670 |
| Restructuring\tand\tasset\timpairment\tcharges | 240 | — | — |
| Amortization\tof\tacquisition-related\tintangibles | 291 | 308 | 260 |
| Operating\texpenses | 19,230 | 18,513 | 16,280 |
| Operating\tincome | 12,291 | 14,638 | 17,477 |
| Gains\t(losses)\ton\tequity\tinvestments,\tnet | 471 | 141 | 112 |
| Interest\tand\tother,\tnet | (151) | 94 | 192 |
| Income\tbefore\ttaxes | 12,611 | 14,873 | 17,781 |
| Provision\tfor\ttaxes | 2,991 | 3,868 | 4,839 |
| Net\tincome | $9,620 | $11,005 | $12,942 |
| Basic\tearnings\tper\tcommon\tshare | $1.94 | $2.20 | $2.46 |
| Diluted\tearnings\tper\tcommon\tshare | $1.89 | $2.13 | $2.39 |
| Weighted\taverage\tcommon\tshares\toutstanding: |  |  |  |
| Basic | 4,970 | 4,996 | 5,256 |
| Diluted | 5,097 | 5,160 | 5,411 |

See	accompanying	notes.

# CONSOLIDATED	STATEMENTS	OF	COMPREHENSIVE	INCOME

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Net\tincome | $9,620 | $11,005 | $12,942 |
| Other\tcomprehensive\tincome,\tnet\tof\ttax: |  |  |  |
| Change\tin\tnet\tunrealized\tholding\tgains\t(losses)\ton\tavailable-for-sale\tinvestments | 1,181 | 470 | (170) |
| Change\tin\tnet\tdeferred\ttax\tasset\tvaluation\tallowance | (26) | (11) | (99) |
| Change\tin\tnet\tunrealized\tholding\tgains\t(losses)\ton\tderivatives | (89) | 85 | (119) |
| Change\tin\tnet\tprior\tservice\tcosts | 18 | — | 4 |
| Change\tin\tactuarial\tvaluation | 520 | (172) | (588) |
| Change\tin\tnet\tforeign\tcurrency\ttranslation\tadjustment | 38 | 10 | (142) |
| Other\tcomprehensive\tincome\t(loss) | 1,642 | 382 | (1,114) |
| Total\tcomprehensive\tincome | $11,262 | $11,387 | $11,828 |

# CONSOLIDATED	BALANCE	SHEETS

| (In	Millions,	Except	Par	Value) | 2013 | 2012 |
| :--- | :--- | :--- |
| Assets |  |  |
| Current\tassets: |  |  |
| Cash\tand\tcash\tequivalents | $5,674 | $8,478 |
| Short-term\tinvestments | 5,972 | 3,999 |
| Trading\tassets | 8,441 | 5,685 |
| Accounts\treceivable,\tnet\tof\tallowance\tfor\tdoubtful\taccounts\tof\t$38\t($38\tin\t2012) | 3,582 | 3,833 |
| Inventories | 4,172 | 4,734 |
| Deferred\ttax\tassets | 2,594 | 2,117 |
| Other\tcurrent\tassets | 1,649 | 2,512 |
| Total\tcurrent\tassets | 32,084 | 31,358 |
| Property,\tplant\tand\tequipment,\tnet | 31,428 | 27,983 |
| Marketable\tequity\tsecurities | 6,221 | 4,424 |
| Other\tlong-term\tinvestments | 1,473 | 493 |
| Goodwill | 10,513 | 9,710 |
| Identified\tintangible\tassets,\tnet | 5,150 | 6,235 |
| Other\tlong-term\tassets | 5,489 | 4,148 |
| Total\tassets | $92,358 | $84,351 |
| Liabilities\tand\tstockholders'\tequity |  |  |
| Current\tliabilities: |  |  |
| Short-term\tdebt | $281 | $312 |
| Accounts\tpayable | 2,969 | 3,023 |
| Accrued\tcompensation\tand\tbenefits | 3,123 | 2,972 |
| Accrued\tadvertising | 1,021 | 1,015 |
| Deferred\tincome | 2,096 | 1,932 |
| Other\taccrued\tliabilities | 4,078 | 3,644 |
| Total\tcurrent\tliabilities | 13,568 | 12,898 |
| Long-term\tdebt | 13,165 | 13,136 |
| Long-term\tdeferred\ttax\tliabilities | 4,397 | 3,412 |
| Other\tlong-term\tliabilities | 2,972 | 3,702 |
| Commitments\tand\tcontingencies\t(Notes\t18\tand\t26) |  |  |
| Stockholders'\tequity: |  |  |
| Preferred\tstock,\t$0.001\tpar\tvalue,\t50\tshares\tauthorized;\tnone\tissued | — | — |
| and\toutstanding\tin\t2012)\tand\tcapital\tin\texcess\tof\tpar\tvalue | 21,536 | 19,464 |
| Accumulated\tother\tcomprehensive\tincome\t(loss) | 1,243 | (399) |
| Retained\tearnings | 35,477 | 32,138 |
| Total\tstockholders'\tequity | 58,256 | 51,203 |
| Total\tliabilities\tand\tstockholders'\tequity | $92,358 | $84,351 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Cash\tand\tcash\tequivalents,\tbeginning\tof\tyear | $8,478 | $5,065 | $5,498 |
| Cash\tflows\tprovided\tby\t(used\tfor)\toperating\tactivities: |  |  |  |
| Net\tincome | 9,620 | 11,005 | 12,942 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation | 6,790 | 6,357 | 5,141 |
| Share-based\tcompensation | 1,118 | 1,102 | 1,053 |
| Restructuring\tand\tasset\timpairment\tcharges | 240 | — | — |
| Excess\ttax\tbenefit\tfrom\tshare-based\tpayment\tarrangements | (49) | (142) | (37) |
| Amortization\tof\tintangibles | 1,242 | 1,165 | 923 |
| (Gains)\tlosses\ton\tequity\tinvestments,\tnet | (425) | (141) | (112) |
| (Gains)\tlosses\ton\tdivestitures | — | — | (164) |
| Deferred\ttaxes | (900) | (242) | 790 |
| Changes\tin\tassets\tand\tliabilities: |  |  |  |
| Accounts\treceivable | 271 | (176) | (678) |
| Inventories | 563 | (626) | (243) |
| Accounts\tpayable | 267 | 67 | 596 |
| Accrued\tcompensation\tand\tbenefits | 155 | 192 | (95) |
| Income\ttaxes\tpayable\tand\treceivable | 1,019 | 229 | 660 |
| Other\tassets\tand\tliabilities | 865 | 94 | 187 |
| Total\tadjustments | 11,156 | 7,879 | 8,021 |
| Net\tcash\tprovided\tby\toperating\tactivities | 20,776 | 18,884 | 20,963 |
| Cash\tflows\tprovided\tby\t(used\tfor)\tinvesting\tactivities: |  |  |  |
| Additions\tto\tproperty,\tplant\tand\tequipment | (10,711) | (11,027) | (10,764) |
| Acquisitions,\tnet\tof\tcash\tacquired | (925) | (638) | (8,721) |
| Purchases\tof\tavailable-for-sale\tinvestments | (12,493) | (8,694) | (11,230) |
| Sales\tof\tavailable-for-sale\tinvestments | 934 | 2,282 | 9,076 |
| Maturities\tof\tavailable-for-sale\tinvestments | 8,336 | 5,369 | 11,029 |
| Purchases\tof\ttrading\tassets | (16,718) | (16,892) | (11,314) |
| Maturities\tand\tsales\tof\ttrading\tassets | 13,677 | 15,786 | 11,771 |
| Collection\tof\tloans\treceivable | 132 | 149 | 134 |
| Origination\tof\tloans\treceivable | (200) | (216) | (206) |
| Investments\tin\tnon-marketable\tequity\tinvestments | (440) | (475) | (693) |
| Proceeds\tfrom\tthe\tsale\tof\tIM\tFlash\tSingapore,\tLLP\tassets\tand\tcertain\tIM\tFlash\tTechnologies,\nLLC\tassets | — | 605 | — |
| Return\tof\tequity\tmethod\tinvestments | 45 | 137 | 263 |
| Purchases\tof\tlicensed\ttechnology\tand\tpatents | (36) | (815) | (66) |
| Proceeds\tfrom\tdivestitures | — | — | 50 |
| Other\tinvesting | 326 | 369 | 370 |
| Net\tcash\tused\tfor\tinvesting\tactivities | (18,073) | (14,060) | (10,301) |
| Cash\tflows\tprovided\tby\t(used\tfor)\tfinancing\tactivities: |  |  |  |
| Increase\t(decrease)\tin\tshort-term\tdebt,\tnet | (31) | 65 | 209 |
| Proceeds\tfrom\tgovernment\tgrants | 129 | 63 | 124 |
| Excess\ttax\tbenefit\tfrom\tshare-based\tpayment\tarrangements | 49 | 142 | 37 |
| Issuance\tof\tlong-term\tdebt,\tnet\tof\tissuance\tcosts | — | 6,124 | 4,962 |
| Repayment\tof\tdebt | — | (125) | — |
| Proceeds\tfrom\tsales\tof\tshares\tthrough\temployee\tequity\tincentive\tplans | 1,588 | 2,111 | 2,045 |
| Repurchase\tof\tcommon\tstock | (2,440) | (5,110) | (14,340) |
| Payment\tof\tdividends\tto\tstockholders | (4,479) | (4,350) | (4,127) |
| Other\tfinancing | (314) | (328) | (10) |
| Net\tcash\tused\tfor\tfinancing\tactivities | (5,498) | (1,408) | (11,100) |
| Effect\tof\texchange\trate\tfluctuations\ton\tcash\tand\tcash\tequivalents | (9) | (3) | 5 |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | (2,804) | 3,413 | (433) |
| Cash\tand\tcash\tequivalents,\tend\tof\tyear | $5,674 | $8,478 | $5,065 |
| Supplemental\tdisclosures\tof\tcash\tflow\tinformation: |  |  |  |
| Cash\tpaid\tduring\tthe\tyear\tfor: |  |  |  |
| Interest,\tnet\tof\tcapitalized\tinterest | $204 | $71 | $— |
| Income\ttaxes,\tnet\tof\trefunds | $2,874 | $3,930 | $3,338 |

# CONSOLIDATED	STATEMENTS	OF	STOCKHOLDERS'	EQUITY

|  | Common	Stock	and	Capital | Common	Stock	and	Capital | Accumulated |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | in\tExcess\tof\tPar\tValue | in\tExcess\tof\tPar\tValue | Other |  |  |
| Three\tYears\tEnded\tDecember\t28,\t2013\n(In\tMillions,\tExcept\tPer\tShare\tAmounts) | Number\tof\nShares | Amount | Comprehensive\nIncome\t(Loss) | Retained\nEarnings | Total |
| Balance\tas\tof\tDecember\t25,\t2010 | 5,511 | $16,178 | $333 | $32,919 | $49,430 |
| Components\tof\tcomprehensive\tincome,\tnet\tof\ttax: |  |  |  |  |  |
| Net\tincome | — | — | — | 12,942 | 12,942 |
| Other\tcomprehensive\tincome\t(loss) | — | — | (1,114) | — | (1,114) |
| Total\tcomprehensive\tincome |  |  |  |  | 11,828 |
| Proceeds\tfrom\tsales\tof\tshares\tthrough\temployee\tequity\nincentive\tplans,\tnet\ttax\tdeficiency,\tand\tother | 142 | 2,019 | — | — | 2,019 |
| Assumption\tof\tequity\tawards\tin\tconnection\twith\nacquisitions | — | 48 | — | — | 48 |
| Share-based\tcompensation | — | 1,053 | — | — | 1,053 |
| Repurchase\tof\tcommon\tstock | (653) | (2,262) | — | (12,078) | (14,340) |
| Cash\tdividends\tdeclared\t($0.7824\tper\tcommon\tshare) | — | — | — | (4,127) | (4,127) |
| Balance\tas\tof\tDecember\t31,\t2011 | 5,000 | 17,036 | (781) | 29,656 | 45,911 |
| Components\tof\tcomprehensive\tincome,\tnet\tof\ttax: |  |  |  |  |  |
| Net\tincome | — | — | — | 11,005 | 11,005 |
| Other\tcomprehensive\tincome\t(loss) | — | — | 382 | — | 382 |
| Total\tcomprehensive\tincome |  |  |  |  | 11,387 |
| Proceeds\tfrom\tsales\tof\tshares\tthrough\temployee\tequity\nincentive\tplans,\tnet\texcess\ttax\tbenefit,\tand\tother | 148 | 2,257 | — | — | 2,257 |
| Share-based\tcompensation | — | 1,108 | — | — | 1,108 |
| Repurchase\tof\tcommon\tstock | (204) | (937) | — | (4,173) | (5,110) |
| Cash\tdividends\tdeclared\t($0.87\tper\tcommon\tshare) | — | — | — | (4,350) | (4,350) |
| Balance\tas\tof\tDecember\t29,\t2012 | 4,944 | 19,464 | (399) | 32,138 | 51,203 |
| Components\tof\tcomprehensive\tincome,\tnet\tof\ttax: |  |  |  |  |  |
| Net\tincome | — | — | — | 9,620 | 9,620 |
| Other\tcomprehensive\tincome\t(loss) | — | — | 1,642 | — | 1,642 |
| Total\tcomprehensive\tincome |  |  |  |  | 11,262 |
| Proceeds\tfrom\tsales\tof\tshares\tthrough\temployee\tequity\nincentive\tplans,\tnet\ttax\tdeficiency,\tand\tother | 130 | 1,593 | — | — | 1,593 |
| Share-based\tcompensation | — | 1,117 | — | — | 1,117 |
| Repurchase\tof\tcommon\tstock | (107) | (638) | — | (1,802) | (2,440) |
| Cash\tdividends\tdeclared\t($0.90\tper\tcommon\tshare) | — | — | — | (4,479) | (4,479) |
| Balance\tas\tof\tDecember\t28,\t2013 | 4,967 | $21,536 | $1,243 | $35,477 | $58,256 |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# Note	1:	Basis	of	Presentation

We	have	a	52-	or	53-week	fiscal	year	that	ends	on	the	last	Saturday	in	December.	Fiscal	years	2013	and	2012	were	52-week	years.	Fiscal	year	2011	was a	53-week	year.	The	next	53-week	year	will	end	on	December	31,	2016.	Our	consolidated	financial	statements	include	the	accounts	of	Intel	Corporation and	our	subsidiaries.	We	have	eliminated	intercompany	accounts	and	transactions.	We	use	the	equity	method	to	account	for	equity	investments	in instances	in	which	we	own	common	stock	or	similar	interests	and	have	the	ability	to	exercise	significant	influence,	but	not	control,	over	the	investee.

In	the	first	quarter	of	2011,	we	completed	the	acquisition	of	McAfee,	Inc.	(McAfee).	For	further	information,	see	" Note	8:	Acquisitions."	Certain	of	the operations	acquired	from	McAfee	have	a	functional	currency	other	than	the	U.S.	dollar.	As	a	result,	we	have	recorded	translation	adjustments	through accumulated	other	comprehensive	income	(loss)	beginning	in	2011.

# Note	2:	Accounting	Policies

# Use	of	Estimates

The	preparation	of	consolidated	financial	statements	in	conformity	with	U.S.	generally	accepted	accounting	principles	requires	us	to	make	estimates	and judgments	that	affect	the	amounts	reported	in	our	consolidated	financial	statements	and	the	accompanying	notes.	The	accounting	estimates	that	require our	most	significant,	difficult,	and	subjective	judgments	include:

•the	valuation	of	non-marketable	equity	investments	and	the	determination	of	other-than-temporary	impairments;

•the	assessment	of	recoverability	of	long-lived	assets	(property,	plant	and	equipment;	goodwill;	and	identified	intangibles);

•the	recognition	and	measurement	of	current	and	deferred	income	taxes	(including	the	measurement	of	uncertain	tax	positions);

•the	valuation	of	inventory;	and

•the	recognition	and	measurement	of	loss	contingencies.

The	actual	results	that	we	experience	may	differ	materially	from	our	estimates.

# Fair	Value

Fair	value	is	the	price	that	would	be	received	from	selling	an	asset	or	paid	to	transfer	a	liability	in	an	orderly	transaction	between	market	participants	at	the measurement	date.	When	determining	fair	value,	we	consider	the	principal	or	most	advantageous	market	in	which	we	would	transact,	and	we	consider assumptions	that	market	participants	would	use	when	pricing	the	asset	or	liability.	Our	financial	assets	are	measured	and	recorded	at	fair	value,	except	for equity	method	investments,	cost	method	investments,	cost	method	loans	receivable,	and	reverse	repurchase	agreements	with	original	maturities	greater than	approximately	three	months.	Most	of	our	liabilities	are	not	measured	and	recorded	at	fair	value.

# Fair	Value	Hierarchy

The	three	levels	of	inputs	that	may	be	used	to	measure	fair	value	are	as	follows:

Level	1.	Quoted	prices	in	active	markets	for	identical	assets	or	liabilities.

Level	2.	Observable	inputs	other	than	Level	1	prices,	such	as	quoted	prices	for	similar	assets	or	liabilities,	quoted	prices	in	less	active	markets,	or	model- derived	valuations	in	which	all	significant	inputs	are	observable	or	can	be	derived	principally	from	or	corroborated	with	observable	market	data	for substantially	the	full	term	of	the	assets	or	liabilities.	Level	2	inputs	also	include	non-binding	market	consensus	prices	that	can	be	corroborated	with observable	market	data,	as	well	as	quoted	prices	that	were	adjusted	for	security-specific	restrictions.

Level	3.	Unobservable	inputs	to	the	valuation	methodology	that	are	significant	to	the	measurement	of	the	fair	value	of	assets	or	liabilities.	Level	3	inputs also	include	non-binding	market	consensus	prices	or	non-binding	broker	quotes	that	we	were	unable	to	corroborate	with	observable	market	data.

For	further	discussion	of	fair	value,	see	" Note	4:	Fair	Value"	and	"Note	17:	Retirement	Benefit	Plans."

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS	(Continued)

# Cash	Equivalents

We	consider	all	highly	liquid	debt	investments	with	original	maturities	from	the	date	of	purchase	of	approximately	three	months	or	less	as	cash equivalents.	Cash	equivalents	can	include	investments	such	as	asset-backed	securities,	bank	deposits,	commercial	paper,	corporate	bonds,	government bonds,	money	market	fund	deposits,	municipal	bonds,	and	reverse	repurchase	agreements	classified	as	cash	equivalents.	See	"Note	4:	Fair	Value"	for the	instruments	held	as	cash	equivalents.

# Trading	Assets

Marketable	debt	instruments	are	generally	designated	as	trading	assets	when	a	market	risk	is	economically	hedged	at	inception	with	a	related	derivative instrument,	or	when	the	marketable	debt	instrument	itself	is	used	to	economically	hedge	foreign	exchange	rate	risk	from	remeasurement.	Investments designated	as	trading	assets	are	reported	at	fair	value.	The	gains	or	losses	of	these	investments	arising	from	changes	in	fair	value	due	to	interest	rate	and currency	market	fluctuations	and	credit	market	volatility,	largely	offset	by	losses	or	gains	on	the	related	derivative	instruments	and	balance	sheet remeasurement,	are	recorded	in	interest	and	other,	net.	We	also	designate	certain	floating-rate	securitized	financial	instruments,	primarily	asset-backed securities,	as	trading	assets.

# Available-for-Sale	Investments

We	consider	all	liquid	available-for-sale	debt	instruments	with	original	maturities	from	the	date	of	purchase	of	approximately	three	months	or	less	to	be cash	and	cash	equivalents.	Available-for-sale	debt	instruments	with	original	maturities	at	the	date	of	purchase	greater	than	approximately	three	months and	remaining	maturities	of	less	than	one	year	are	classified	as	short-term	investments.	Available-for-sale	debt	instruments	with	remaining	maturities beyond	one	year	are	classified	as	other	long-term	investments.

Investments	that	we	designate	as	available-for-sale	are	reported	at	fair	value,	with	unrealized	gains	and	losses,	net	of	tax,	recorded	in	accumulated	other comprehensive	income	(loss),	except	as	noted	in	the	"Other-Than-Temporary	Impairment"	section	that	follows.	We	determine	the	cost	of	the	investment sold	based	on	an	average	cost	basis	at	the	individual	security	level.	Our	available-for-sale	investments	include:

•Marketable	debt	instruments	when	the	interest	rate	and	foreign	currency	risks	are	not	hedged	at	the	inception	of	the	investment	or	when	our	criteria for	designation	as	trading	assets	are	not	met.	We	generally	hold	these	debt	instruments	to	generate	a	return	commensurate	with	the	U.S.-dollar	three- month	LIBOR.	We	record	the	interest	income	and	realized	gains	and	losses	on	the	sale	of	these	instruments	in	interest	and	other,	net. •Marketable	equity	securities	when	there	is	no	plan	to	sell	or	hedge	the	investment	at	the	time	of	original	classification.	We	acquire	these	equity investments	to	promote	business	and	strategic	objectives.	To	the	extent	that	these	investments	continue	to	have	strategic	value,	we	typically	do	not attempt	to	reduce	or	eliminate	the	equity	market	risks	through	hedging	activities.	We	record	the	realized	gains	or	losses	on	the	sale	or	exchange	of marketable	equity	securities	in	gains	(losses)	on	equity	investments,	net.

# Non-Marketable	and	Other	Equity	Investments

Our	non-marketable	equity	and	other	equity	investments	are	included	in	other	long-term	assets.	We	account	for	non-marketable	equity	and	other	equity investments	for	which	we	do	not	have	control	over	the	investee	as:

•Equity	method	investments	when	we	have	the	ability	to	exercise	significant	influence,	but	not	control,	over	the	investee.	Equity	method	investments include	marketable	and	non-marketable	investments.	Our	proportionate	share	of	the	income	or	loss	is	recognized	on	a	one-quarter	lag	and	is recorded	in	gains	(losses)	on	equity	investments,	net.

•Non-marketable	cost	method	investments	when	the	equity	method	does	not	apply.	We	record	the	realized	gains	or	losses	on	the	sale	of	non- marketable	cost	method	investments	in	gains	(losses)	on	equity	investments,	net.

# Other-Than-Temporary	Impairment

Our	available-for-sale	investments	and	non-marketable	and	other	equity	investments	are	subject	to	a	periodic	impairment	review.	Investments	are considered	impaired	when	the	fair	value	is	below	the	investment's	adjusted	cost	basis.	Impairments	affect	earnings	as	follows:

•Marketable	debt	instruments	when	the	fair	value	is	below	amortized	cost	and	we	intend	to	sell	the	instrument,	or	when	it	is	more	likely	than	not	that	we will	be	required	to	sell	the	instrument	before	recovery	of	its	amortized	cost	basis,	or	when	we	do	not	expect	to	recover	the	entire	amortized	cost	basis of	the	instrument	(that	is,	a	credit	loss	exists).	When	we	do	not	expect	to	recover	the	entire	amortized	cost	basis	of	the	instrument,	we	separate	other- than-temporary	impairments	into	amounts	representing	credit	losses,	which	are	recognized	in	interest	and	other,	net,	and	amounts	related	to	all	other factors,	which	are	recognized	in	other	comprehensive	income	(loss).

•Marketable	equity	securities	based	on	the	specific	facts	and	circumstances	present	at	the	time	of	assessment,	which	include	the	consideration	of general	market	conditions,	the	duration	and	extent	to	which	the	fair	value	is	below	cost,	and	our	ability	and	intent	to	hold	the	investment	for	a	sufficient period	of	time	to	allow	for	recovery	of	value	in	the	foreseeable	future.	We	also	consider	specific	adverse	conditions	related	to	the	financial	health	of, and	the	business	outlook	for,	the	investee,	which	may	include	industry	and	sector	performance,	changes	in	technology,	operational	and	financing cash	flow	factors,	and	changes	in	the	investee's	credit	rating.	We	record	other-than-temporary	impairment	charges	on	marketable	equity	securities and	marketable	equity	method	investments	in	gains	(losses)	on	equity	investments,	net.

•Non-marketable	equity	investments	based	on	our	assessment	of	the	severity	and	duration	of	the	impairment,	and	qualitative	and	quantitative	analysis, including:

•the	general	market	conditions	in	the	investee's	industry	or	geographic	area,	including	adverse	regulatory	or	economic	changes;

•factors	related	to	the	investee's	ability	to	remain	in	business,	such	as	the	investee's	liquidity	and	debt	ratios,	and	the	rate	at	which	the	investee	is using	its	cash;	and

We	record	other-than-temporary	impairment	charges	for	non-marketable	cost	method	investments	and	equity	method	investments	in	gains	(losses)	on equity	investments,	net.

# Derivative	Financial	Instruments

Our	primary	objective	for	holding	derivative	financial	instruments	is	to	manage	currency	exchange	rate	and	interest	rate	risk,	and,	to	a	lesser	extent,	equity market	risk,	commodity	price	risk,	and	credit	risk.	Our	derivative	financial	instruments	are	recorded	at	fair	value	and	are	included	in	other	current	assets, other	long-term	assets,	other	accrued	liabilities,	or	other	long-term	liabilities.

Our	accounting	policies	for	derivative	financial	instruments	are	based	on	whether	they	meet	the	criteria	for	designation	as	a	cash	flow	hedge.	A	designated hedge	with	exposure	to	variability	in	the	functional	currency	equivalent	of	the	future	foreign	currency	cash	flows	of	a	forecasted	transaction	is	one	example of	a	cash	flow	hedge.	The	criteria	for	designating	a	derivative	as	a	cash	flow	hedge	include	the	assessment	of	the	instrument's	effectiveness	in	risk reduction,	matching	of	the	derivative	instrument	to	its	underlying	transaction,	and	the	assessment	of	the	probability	that	the	underlying	transaction	will occur.	For	derivatives	with	cash	flow	hedge	accounting	designation,	we	report	the	after-tax	gain	or	loss	from	the	effective	portion	of	the	hedge	as	a component	of	accumulated	other	comprehensive	income	(loss)	and	reclassify	it	into	earnings	in	the	same	period	or	periods	in	which	the	hedged transaction	affects	earnings,	and	in	the	same	line	item	on	the	consolidated	statements	of	income	as	the	impact	of	the	hedged	transaction.	Derivatives	that we	designate	as	cash	flow	hedges	are	classified	in	the	consolidated	statements	of	cash	flows	in	the	same	section	as	the	underlying	item,	primarily	within cash	flows	from	operating	activities.

We	recognize	gains	and	losses	from	changes	in	fair	value	of	derivatives	that	are	not	designated	as	hedges	for	accounting	purposes	in	the	line	item	on	the consolidated	statements	of	income	most	closely	associated	with	the	related	exposures,	primarily	in	interest	and	other,	net	and	gains	(losses)	on	equity investments,	net.	As	part	of	our	strategic	investment	program,	we	also	acquire	equity	derivative	instruments,	such	as	equity	conversion	rights	associated with	debt	instruments,	that	we	do	not	designate	as	hedging	instruments.	We	recognize	the	gains	or	losses	from	changes	in	fair	value	of	these	equity derivative	instruments	in	gains	(losses)	on	equity	investments,	net.	Gains	and	losses	from	derivatives	not	designated	as	hedges	are	classified	in	the consolidated	statements	of	cash	flows	within	cash	flows	from	operating	activities.

# Measurement	of	Effectiveness

•Effectiveness	for	forwards	is	generally	measured	by	comparing	the	cumulative	change	in	the	fair	value	of	the	hedge	contract	with	the	cumulative change	in	the	fair	value	of	the	forecasted	cash	flows	of	the	hedged	item.	For	currency	forward	contracts	used	in	cash	flow	hedging	strategies	related to	capital	purchases,	forward	points	are	excluded,	and	effectiveness	is	measured	using	spot	rates	to	value	both	the	hedge	contract	and	the	hedged item.	For	currency	forward	contracts	used	in	cash	flow	hedging	strategies	related	to	operating	expenditures,	forward	points	are	included	and effectiveness	is	measured	using	forward	rates	to	value	both	the	hedge	contract	and	the	hedged	item.

•Effectiveness	for	options	is	generally	measured	by	comparing	the	cumulative	change	in	the	intrinsic	value	of	the	hedge	contract	with	the	cumulative change	in	the	intrinsic	value	of	an	option	instrument	representing	the	hedged	risks	in	the	hedged	item.	Time	value	is	excluded	and	effectiveness	is measured	using	spot	rates	to	value	both	the	hedge	contract	and	the	hedged	item.

•Effectiveness	for	interest	rate	swaps	and	commodity	swaps 	is	generally	measured	by	comparing	the	cumulative	change	in	fair	value	of	the	swap	with the	cumulative	change	in	the	fair	value	of	the	hedged	item.

If	a	cash	flow	hedge	is	discontinued	because	it	is	probable	that	the	original	hedged	transaction	will	not	occur	as	previously	anticipated,	the	cumulative unrealized	gain	or	loss	on	the	related	derivative	is	reclassified	from	accumulated	other	comprehensive	income	(loss)	into	earnings.	Subsequent	gains	or losses	on	the	related	derivative	instrument	are	recognized	in	interest	and	other,	net	in	each	period	until	the	instrument	matures,	is	terminated,	is	re- designated	as	a	qualified	cash	flow	hedge,	or	is	sold.	Ineffective	portions	of	cash	flow	hedges,	as	well	as	amounts	excluded	from	the	assessment	of effectiveness,	are	recognized	in	earnings	in	interest	and	other,	net.	For	further	discussion	of	our	derivative	instruments	and	risk	management	programs, see	"Note	6:	Derivative	Financial	Instruments."

# Securities	Lending

We	may	enter	into	securities	lending	agreements	with	financial	institutions,	generally	to	facilitate	hedging	and	certain	investment	transactions.	Selected securities	may	be	loaned,	secured	by	collateral	in	the	form	of	cash	or	securities.	The	loaned	securities	continue	to	be	carried	as	investment	assets	on	our consolidated	balance	sheets.	For	lending	agreements	collateralized	by	cash	and	cash	equivalents,	collateral	is	recorded	as	an	asset	with	a	corresponding liability.	For	lending	agreements	collateralized	by	other	securities,	we	do	not	record	the	collateral	as	an	asset	or	a	liability,	unless	the	collateral	is repledged.

# Loans	Receivable

We	make	loans	to	third	parties	that	are	classified	within	other	current	assets	or	other	long-term	assets.	We	may	elect	the	fair	value	option	for	loans	when the	interest	rate	or	foreign	currency	exchange	rate	risk	is	economically	hedged	at	inception	with	a	related	derivative	instrument.	We	record	the	gains	or losses	on	these	loans	arising	from	changes	in	fair	value	due	to	interest	rate,	currency,	and	counterparty	credit	changes,	largely	offset	by	losses	or	gains on	the	related	derivative	instruments,	in	interest	and	other,	net.	Loans	that	are	denominated	in	U.S.	dollars	and	have	a	floating-rate	coupon	are	carried	at amortized	cost.	We	measure	interest	income	for	all	loans	receivable	using	the	interest	method,	which	is	based	on	the	effective	yield	of	the	loans	rather than	the	stated	coupon	rate.	For	further	discussion	of	our	loans	receivable,	see	"Note	4:	Fair	Value."

# Inventories

We	compute	inventory	cost	on	a	first-in,	first-out	basis.	Costs	incurred	to	manufacture	our	products	are	included	in	the	valuation	of	inventory	beginning	in the	quarter	in	which	a	product	meets	the	technical	criteria	to	qualify	for	sale	to	customers.	Prior	to	qualification	for	sale,	costs	that	do	not	meet	the	criteria for	research	and	development	(R&D)	are	included	in	cost	of	sales	in	the	period	incurred.	Inventories	at	the	end	of	each	period	were	as	follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 |
| :--- | :--- | :--- |
| Raw\tmaterials | $458 | $478 |
| Work\tin\tprocess | 1,998 | 2,219 |
| Finished\tgoods | 1,716 | 2,037 |
| Total\tinventories | $4,172 | $4,734 |

Property,	plant	and	equipment,	net	at	the	end	of	each	period	were	as	follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 |
| :--- | :--- | :--- |
| Land\tand\tbuildings | $21,098 | $18,807 |
| Machinery\tand\tequipment | 40,540 | 39,033 |
| Construction\tin\tprogress | 11,778 | 8,206 |
| Total\tproperty,\tplant\tand\tequipment,\tgross | 73,416 | 66,046 |
| Less:\taccumulated\tdepreciation | (41,988) | (38,063) |
| Total\tproperty,\tplant\tand\tequipment,\tnet | $31,428 | $27,983 |

We	compute	depreciation	for	financial	reporting	purposes	using	the	straight-line	method.	Substantially	all	of	our	depreciable	property,	plant	and	equipment assets	are	depreciated	over	the	following	estimated	useful	lives:	machinery	and	equipment,	2	to	4	years;	buildings,	10	to	25	years.

We	capitalize	a	majority	of	interest	on	borrowings	related	to	eligible	capital	expenditures.	Capitalized	interest	is	added	to	the	cost	of	qualified	assets	and amortized	over	the	estimated	useful	lives	of	the	assets.	We	record	capital-related	government	grants	earned	as	a	reduction	to	property,	plant	and equipment.

We	record	goodwill	when	the	purchase	price	of	an	acquisition	exceeds	the	fair	value	of	the	net	tangible	and	identified	intangible	assets	as	of	the	date	of acquisition,	assigning	the	goodwill	to	our	applicable	reporting	units	based	on	the	relative	expected	fair	value	provided	by	the	acquisition.	We	perform	a quarterly	review	of	goodwill	for	indicators	of	impairment.	During	the	fourth	quarter	of	each	year,	we	perform	an	impairment	assessment	for	each	reporting unit,	and	we	perform	impairment	tests	using	a	fair	value	approach	when	necessary.	The	reporting	unit's	carrying	value	used	in	an	impairment	test represents	the	assignment	of	various	assets	and	liabilities,	excluding	certain	corporate	assets	and	liabilities,	such	as	cash,	investments,	and	debt.	For further	discussion	of	goodwill,	see	"Note	10:	Goodwill."

# Identified	Intangible	Assets

Licensed	technology	and	patents	are	generally	amortized	on	a	straight-line	basis	over	the	periods	of	benefit.	We	amortize	all	acquisition-related	intangible assets	that	are	subject	to	amortization	over	their	estimated	useful	life	based	on	economic	benefit.	Acquisition-related	in-process	R&D	assets	represent	the fair	value	of	incomplete	R&D	projects	that	had	not	reached	technological	feasibility	as	of	the	date	of	acquisition;	initially,	these	are	classified	as	"other intangible	assets"	that	are	not	subject	to	amortization.	Assets	related	to	projects	that	have	been	completed	are	transferred	from	"other	intangible	assets"	to "acquisition-related	developed	technology;"	these	are	subject	to	amortization,	while	assets	related	to	projects	that	have	been	abandoned	are	impaired	and expensed	to	R&D.	In	the	quarter	following	the	period	in	which	identified	intangible	assets	become	fully	amortized,	we	remove	the	fully	amortized	balances from	the	gross	asset	and	accumulated	amortization	amounts.

The	estimated	useful	life	ranges	for	substantially	all	identified	intangible	assets	that	are	subject	to	amortization	as	of December	28,	2013,	were	as	follows:

| (In	Years) | Estimated<br>Useful	Life | Estimated<br>Useful	Life | Estimated<br>Useful	Life |
| :--- | :--- | :--- | :--- |
| Acquisition-related\tdeveloped\ttechnology | 4 | – | 9 |
| Acquisition-related\tcustomer\trelationships | 5 | – | 8 |
| Acquisition-related\ttrade\tnames | 4 | – | 8 |
| Licensed\ttechnology\tand\tpatents | 5 | – | 17 |

We	perform	a	quarterly	review	of	finite-lived	identified	intangible	assets	to	determine	whether	facts	and	circumstances	indicate	that	the	useful	life	is	shorter than	we	had	originally	estimated	or	that	the	carrying	amount	of	assets	may	not	be	recoverable.	If	such	facts	and	circumstances	exist,	we	assess recoverability	by	comparing	the	projected	undiscounted	net	cash	flows	associated	with	the	related	asset	or	group	of	assets	over	their	remaining	lives against	their	respective	carrying	amounts.	Impairments,	if	any,	are	based	on	the	excess	of	the	carrying	amount	over	the	fair	value	of	those	assets.	If	an asset's	useful	life	is	shorter	than	originally	estimated,	we	accelerate	the	rate	of	amortization	and	amortize	the	remaining	carrying	value	over	the	new shorter	useful	life.	We	perform	an	annual	impairment	assessment	in	the	fourth	quarter	of	each	year	for	indefinite-lived	intangible	assets,	or	more frequently	if	indicators	of	potential	impairment	exist,	to	determine	whether	it	is	more	likely	than	not	that	the	carrying	value	of	the	assets	may	not	be recoverable.	If	necessary,	a	quantitative	impairment	test	is	performed	to	compare	the	fair	value	of	the	indefinite-lived	intangible	asset	with	its	carrying value.	Impairments,	if	any,	are	based	on	the	excess	of	the	carrying	amount	over	the	fair	value	of	those	assets.

For	further	discussion	of	identified	intangible	assets,	see	" Note	11:	Identified	Intangible	Assets."

# Product	Warranty

The	vast	majority	of	our	products	are	sold	with	a	limited	warranty	on	product	quality	and	a	limited	indemnification	for	customers	against	intellectual	property (IP)	rights	infringement	claims	related	to	our	products.	The	accrual	and	the	related	expense	for	known	product	warranty	issues	were	not	significant	during the	periods	presented.	Due	to	product	testing,	the	short	time	typically	between	product	shipment	and	the	detection	and	correction	of	product	failures,	and the	historical	rate	of	payments	on	indemnification	claims,	the	accrual	and	related	expense	for	estimated	incurred	but	unidentified	issues	were	not significant	during	the	periods	presented.

# Revenue	Recognition

We	recognize	net	product	revenue	when	the	earnings	process	is	complete,	as	evidenced	by	an	agreement	with	the	customer,	delivery	has	occurred,	and acceptance,	if	applicable,	as	well	as	fixed	pricing	and	probable	collectibility.	We	record	pricing	allowances,	including	discounts	based	on	contractual arrangements	with	customers,	when	we	recognize	revenue	as	a	reduction	to	both	accounts	receivable	and	net	revenue.	Because	of	frequent	sales	price reductions	and	rapid	technology	obsolescence	in	the	industry,	we	defer	product	revenue	and	related	costs	of	sales	from	component	sales	made	to distributors	under	agreements	allowing	price	protection	or	right	of	return	until	the	distributors	sell	the	merchandise.	The	right	of	return	granted	generally consists	of	a	stock	rotation	program	in	which	distributors	are	able	to	exchange	certain	products	based	on	the	number	of	qualified	purchases	made	by	the distributor.	Under	the	price	protection	program,	we	give	distributors	credits	for	the	difference	between	the	original	price	paid	and	the	current	price	that	we offer.	We	include	shipping	charges	billed	to	customers	in	net	revenue,	and	include	the	related	shipping	costs	in	cost	of	sales.

Revenue	from	license	agreements	with	our	McAfee	business	generally	includes	service	and	support	agreements	for	which	the	related	revenue	is	deferred and	recognized	ratably	over	the	performance	period.	Revenue	derived	from	online	subscription	products	is	deferred	and	recognized	ratably	over	the performance	period.	Professional	services	revenue	is	recognized	as	services	are	performed	or,	if	required,	upon	customer	acceptance.	For	arrangements with	multiple	elements,	including	software	licenses,	maintenance,	and/or	services,	revenue	is	allocated	across	the	separately	identified	deliverables	and may	be	recognized	or	deferred.	When	vendor-specific	objective	evidence	(VSOE)	does	not	exist	for	undelivered	elements	such	as	maintenance	and support,	the	entire	arrangement	fee	is	recognized	ratably	over	the	performance	period.	Direct	costs,	such	as	costs	related	to	revenue-sharing	and	royalty arrangements	associated	with	license	arrangements,	as	well	as	component	costs	associated	with	product	revenue	and	sales	commissions,	are	deferred and	amortized	over	the	same	period	that	the	related	revenue	is	recognized.

We	record	deferred	revenue	offset	by	the	related	cost	of	sales	on	our	consolidated	balance	sheets	as	deferred	income.

# Advertising

Cooperative	advertising	programs	reimburse	customers	for	marketing	activities	for	certain	of	our	products,	subject	to	defined	criteria.	We	accrue cooperative	advertising	obligations	and	record	the	costs	at	the	same	time	that	the	related	revenue	is	recognized.	We	record	cooperative	advertising	costs as	marketing,	general	and	administrative	(MG&A)	expenses	to	the	extent	that	an	advertising	benefit	separate	from	the	revenue	transaction	can	be identified	and	the	fair	value	of	that	advertising	benefit	received	is	determinable.	We	record	any	excess	in	cash	paid	over	the	fair	value	of	the	advertising benefit	received	as	a	reduction	in	revenue.	Advertising	costs,	including	direct	marketing	costs,	recorded	within	MG&A	expenses	were	$1.9	billion	in	2013 ($2.0	billion	in	2012	and	$2.1	billion	in	2011).

# Employee	Equity	Incentive	Plans

We	have	employee	equity	incentive	plans,	which	are	described	more	fully	in	" Note	19:	Employee	Equity	Incentive	Plans."	We	use	the	straight-line attribution	method	to	recognize	share-based	compensation	over	the	service	period	of	the	award.	Upon	exercise,	cancellation,	forfeiture,	or	expiration	of stock	options,	or	upon	vesting	or	forfeiture	of	restricted	stock	units	(RSUs),	we	eliminate	deferred	tax	assets	for	options	and	restricted	stock	units	with multiple	vesting	dates	for	each	vesting	period	on	a	first-in,	first-out	basis	as	if	each	vesting	period	were	a	separate	award.

We	compute	the	provision	for	income	taxes	using	the	asset	and	liability	method,	under	which	deferred	tax	assets	and	liabilities	are	recognized	for	the expected	future	tax	consequences	of	temporary	differences	between	the	financial	reporting	and	tax	bases	of	assets	and	liabilities,	and	for	operating	losses and	tax	credit	carryforwards.	We	measure	deferred	tax	assets	and	liabilities	using	the	currently	enacted	tax	rates	that	apply	to	taxable	income	in	effect	for the	years	in	which	those	tax	assets	are	expected	to	be	realized	or	settled.	We	record	a	valuation	allowance	to	reduce	deferred	tax	assets	to	the	amount that	it	is	believed	more	likely	than	not	to	be	realized.

We	recognize	tax	benefits	from	uncertain	tax	positions	only	if	that	tax	position	is	more	likely	than	not	to	be	sustained	on	examination	by	the	taxing authorities,	based	on	the	technical	merits	of	the	position.	We	then	measure	the	tax	benefits	recognized	in	the	financial	statements	from	such	positions based	on	the	largest	benefit	that	has	a	greater	than	50%	likelihood	of	being	realized	upon	ultimate	settlement.	We	recognize	interest	and	penalties	related to	unrecognized	tax	benefits	within	the	provision	for	taxes	on	the	consolidated	statements	of	income.	For	more	information	about	income	taxes,	see	"Note 24:	Income	Taxes."

# Note	3:	Accounting	Changes

In	the	first	quarter	of	2012,	we	adopted	amended	standards	that	increase	the	prominence	of	items	reported	in	other	comprehensive	income.	These amended	standards	eliminate	the	option	to	present	components	of	other	comprehensive	income	as	part	of	the	statement	of	changes	in	stockholders' equity,	and	they	require	that	all	changes	in	stockholders'	equity—except	investments	by,	and	distributions	to,	owners—be	presented	either	in	a	single continuous	statement	of	comprehensive	income	or	in	two	separate	but	consecutive	statements.	Our	adoption	of	these	amended	standards	impacted	the presentation	of	other	comprehensive	income,	as	we	have	elected	to	present	two	separate	but	consecutive	statements,	but	it	did	not	have	an	impact	on	our financial	position	or	results	of	operations.

In	the	fourth	quarter	of	2012,	we	adopted	amended	standards	to	simplify	how	we	test	indefinite-lived	intangible	assets	for	impairment;	these	amended standards	improve	consistency	in	impairment	testing	requirements	among	long-lived	asset	categories.	The	amended	standards	allow	for	an	assessment of	qualitative	factors	such	that	we	can	determine	whether	the	fair	value	of	an	indefinite-lived	intangible	asset	is	more	likely	than	not	to	be	less	than	its carrying	value.	For	assets	in	which	this	assessment	concludes	that	the	fair	value	is	more	likely	than	not	to	be	more	than	its	carrying	value,	these	amended standards	eliminate	the	requirement	to	perform	quantitative	impairment	testing	as	outlined	in	the	previously	issued	standards.	Our	adoption	of	these amended	standards	did	not	have	an	impact	on	our	consolidated	financial	statements.

In	the	first	quarter	of	2011,	we	adopted	new	standards	for	revenue	recognition	with	multiple	deliverables.	These	new	standards	change	the	determination of	whether	the	individual	deliverables	included	in	a	multiple-element	arrangement	may	be	treated	as	separate	units	for	accounting	purposes.	Additionally, these	new	standards	modify	the	method	by	which	revenue	is	allocated	to	the	separately	identified	deliverables.	The	adoption	of	these	new	standards	did not	have	a	significant	impact	on	our	consolidated	financial	statements.

In	the	first	quarter	of	2011,	we	adopted	new	standards	that	remove	certain	tangible	products	and	associated	software	from	the	scope	of	the	software revenue	recognition	guidance.	The	adoption	of	these	new	standards	did	not	have	a	significant	impact	on	our	consolidated	financial	statements.

In	the	fourth	quarter	of	2011,	we	adopted	amended	standards	that	simplify	how	entities	test	goodwill	for	impairment.	These	amended	standards	allow	for an	assessment	of	qualitative	factors	such	that	we	can	determine	whether	the	fair	value	of	a	reporting	unit	in	which	goodwill	resides	is	more	likely	than	not to	be	less	than	its	carrying	value.	For	reporting	units	in	which	this	assessment	concludes	that	the	fair	value	is	more	likely	than	not	to	be	more	than	its carrying	value,	these	amended	standards	eliminate	the	requirement	to	perform	goodwill	impairment	testing.	Our	adoption	of	these	amended	standards	did not	have	an	impact	on	our	consolidated	financial	statements.

# Note	4:	Fair	Value

# Assets/Liabilities	Measured	and	Recorded	at	Fair	Value	on	a	Recurring	Basis

Assets	and	liabilities	measured	and	recorded	at	fair	value	on	a	recurring	basis	consisted	of	the	following	types	of	instruments	at	the	end	of	each	period were	as	follows:

| (In	Millions) | Level	1 | Level	2 | Level	3 | Total | Level	1 | Level	2 | Level	3 | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |  |  |  |
| Cash\tequivalents: |  |  |  |  |  |  |  |  |
| Bank\tdeposits | $— | $1,017 | $— | $1,017 | $— | $822 | $— | $822 |
| Commercial\tpaper | — | 2,341 | — | 2,341 | — | 2,711 | — | 2,711 |
| Corporate\tbonds | — | 21 | — | 21 | — | — | — | — |
| Government\tbonds | — | — | — | — | 400 | 66 | — | 466 |
| Money\tmarket\tfund\tdeposits | 1,041 | — | — | 1,041 | 1,086 | — | — | 1,086 |
| Reverse\trepurchase\tagreements | — | 400 | — | 400 | — | 2,800 | — | 2,800 |
| Short-term\tinvestments: |  |  |  |  |  |  |  |  |
| Bank\tdeposits | — | 1,782 | — | 1,782 | — | 540 | — | 540 |
| Commercial\tpaper | — | 2,123 | — | 2,123 | — | 1,474 | — | 1,474 |
| Corporate\tbonds | 383 | 1,121 | 19 | 1,523 | 75 | 292 | 21 | 388 |
| Government\tbonds | 268 | 276 | — | 544 | 1,307 | 290 | — | 1,597 |
| Trading\tassets: |  |  |  |  |  |  |  |  |
| Asset-backed\tsecurities | — | 684 | 4 | 688 | — | — | 68 | 68 |
| Bank\tdeposits | — | 92 | — | 92 | — | 247 | — | 247 |
| Commercial\tpaper | — | 240 | — | 240 | — | 336 | — | 336 |
| Corporate\tbonds | 2,625 | 773 | — | 3,398 | 482 | 1,109 | — | 1,591 |
| Government\tbonds | 2,267 | 1,618 | — | 3,885 | 1,743 | 1,479 | — | 3,222 |
| Money\tmarket\tfund\tdeposits | 82 | — | — | 82 | 18 | — | — | 18 |
| Municipal\tbonds | — | 56 | — | 56 | — | 203 | — | 203 |
| Other\tcurrent\tassets: |  |  |  |  |  |  |  |  |
| Derivative\tassets | 48 | 309 | — | 357 | 12 | 208 | 1 | 221 |
| Loans\treceivable | — | 103 | — | 103 | — | 203 | — | 203 |
| Marketable\tequity\tsecurities | 6,221 | — | — | 6,221 | 4,424 | — | — | 4,424 |
| Other\tlong-term\tinvestments: |  |  |  |  |  |  |  |  |
| Asset-backed\tsecurities | — | — | 9 | 9 | — | — | 11 | 11 |
| Bank\tdeposits | — | 157 | — | 157 | — | 56 | — | 56 |
| Corporate\tbonds | 282 | 518 | 27 | 827 | 10 | 218 | 26 | 254 |
| Government\tbonds | 295 | 185 | — | 480 | 59 | 113 | — | 172 |
| Other\tlong-term\tassets: |  |  |  |  |  |  |  |  |
| Derivative\tassets | — | 7 | 29 | 36 | — | 20 | 18 | 38 |
| Loans\treceivable | — | 702 | — | 702 | — | 577 | — | 577 |
| Total\tassets\tmeasured\tand\trecorded\tat\nfair\tvalue | $13,512 | $14,525 | $88 | $28,125 | $9,616 | $13,764 | $145 | $23,525 |
| Liabilities |  |  |  |  |  |  |  |  |
| Other\taccrued\tliabilities: |  |  |  |  |  |  |  |  |
| Derivative\tliabilities | $— | $372 | $— | $372 | $1 | $291 | $— | $292 |
| Other\tlong-term\tliabilities: |  |  |  |  |  |  |  |  |
| Derivative\tliabilities | — | 50 | — | 50 | — | 20 | — | 20 |
| Total\tliabilities\tmeasured\tand\trecorded\nat\tfair\tvalue | $— | $422 | $— | $422 | $1 | $311 | $— | $312 |

Government	bonds	include	bonds	issued	or	deemed	to	be	guaranteed	by	government	entities.	Government	bonds	include	instruments	such	as	non-U.S. government	bonds,	U.S.	agency	securities,	and	U.S.	Treasury	securities.

# Investments	in	Debt	Securities

Debt	securities	reflected	in	the	preceding	table	 include	investments	such	as	asset-backed	securities,	bank	deposits,	commercial	paper,	corporate	bonds, government	bonds,	money	market	fund	deposits,	municipal	bonds,	and	reverse	repurchase	agreements	classified	as	cash	equivalents.	When	we	use observable	market	prices	for	identical	securities	that	are	traded	in	less	active	markets,	we	classify	our	debt	investments	as	Level	2.	When	observable market	prices	for	identical	securities	are	not	available,	we	price	our	debt	investments	using	non-binding	market	consensus	prices	that	are	corroborated with	observable	market	data;	quoted	market	prices	for	similar	instruments;	or	pricing	models,	such	as	a	discounted	cash	flow	model,	with	all	significant inputs	derived	from	or	corroborated	with	observable	market	data.	Non-binding	market	consensus	prices	are	based	on	the	proprietary	valuation	models	of pricing	providers	or	brokers.	These	valuation	models	incorporate	a	number	of	inputs,	including	non-binding	and	binding	broker	quotes;	observable	market prices	for	identical	or	similar	securities;	and	the	internal	assumptions	of	pricing	providers	or	brokers	that	use	observable	market	inputs	and	unobservable market	inputs	that	we	consider	to	be	not	significant.	We	corroborate	non-binding	market	consensus	prices	with	observable	market	data	using	statistical models	when	observable	market	data	exists.	The	discounted	cash	flow	model	uses	observable	market	inputs,	such	as	LIBOR-based	yield	curves,	currency spot	and	forward	rates,	and	credit	ratings.

Debt	securities	classified	as	Level	3,	are	 classified	as	such	because	the	fair	values	are	generally	derived	from	discounted	cash	flow	models,	performed either	by	us	or	our	pricing	providers,	using	inputs	that	we	are	unable	to	corroborate	with	observable	market	data.	We	monitor	and	review	the	inputs	and results	of	these	valuation	models	to	ensure	the	fair	value	measurements	are	reasonable	and	consistent	with	market	experience	in	similar	asset	classes.

# Fair	Value	Option	for	Loans	Receivable

We	elected	the	fair	value	option	for	loans	receivable	when	the	interest	rate	or	currency	exchange	rate	risk	was	hedged	at	inception	with	a	related derivative	instrument.	As	of	December	28,	2013,	the	fair	value	of	our	loans	receivable	for	which	we	elected	the	fair	value	option	did	not	significantly	differ from	the	contractual	principal	balance	based	on	the	contractual	currency.	Loans	receivable	are	classified	within	other	current	assets	and	other	long-term assets.	Fair	value	is	determined	using	a	discounted	cash	flow	model,	with	all	significant	inputs	derived	from	or	corroborated	with	observable	market	data. Gains	and	losses	from	changes	in	fair	value	on	the	loans	receivable	and	related	derivative	instruments,	as	well	as	interest	income,	are	recorded	in	interest and	other,	net.	During	all	periods	presented,	changes	in	the	fair	value	of	our	loans	receivable	were	largely	offset	by	changes	in	the	related	derivative instruments,	resulting	in	an	insignificant	net	impact	on	our	consolidated	statements	of	income.	Gains	and	losses	attributable	to	changes	in	credit	risk	are determined	using	observable	credit	default	spreads	for	the	issuer	or	comparable	companies;	these	gains	and	losses	were	insignificant	during	all	periods presented.	We	did	not	elect	the	fair	value	option	for	loans	receivable	when	the	interest	rate	or	foreign	exchange	rate	risk	was	not	hedged	at	inception	with a	related	derivative	instrument.	Loans	receivable	not	measured	and	recorded	at	fair	value	are	included	in	the	"Financial	Instruments	Not	Recorded	at	Fair Value	on	a	Recurring	Basis"	section	that	follows.

# Assets	Measured	and	Recorded	at	Fair	Value	on	a	Non-Recurring	Basis

Our	non-marketable	equity	investments,	marketable	equity	method	investments,	and	non-financial	assets,	such	as	intangible	assets	and	property,	plant and	equipment,	are	recorded	at	fair	value	only	if	an	impairment	charge	is	recognized.

A	portion	of	our	non-marketable	equity	investments	has	been	measured	and	recorded	at	fair	value	due	to	events	or	circumstances	that	significantly impacted	the	fair	value	of	those	investments,	resulting	in	other-than-temporary	impairment	charges.	We	classified	these	investments	as	Level	3,	as	we used	unobservable	inputs	to	the	valuation	methodologies	that	were	significant	to	the	fair	value	measurements,	and	the	valuations	required	management judgment	due	to	the	absence	of	quoted	market	prices.	Impairment	charges	recognized	on	non-marketable	equity	investments	held	as	of	December	28, 2013,	were	$106	million	during	2013	($68	million	during	2012	on	non-marketable	equity	investments	held	as	of	 December	29,	2012	and	$62	million	during 2011	on	non-marketable	equity	investments	held	as	of	 December	31,	2011).	The	fair	value	of	the	non-marketable	equity	investments	impaired	during 2013	was	$47	million	at	the	time	of	impairment	( $73	million	and	$69	million	for	non-marketable	equity	investments	impaired	during	2012	and	2011, respectively).

# Financial	Instruments	Not	Recorded	at	Fair	Value	on	a	Recurring	Basis

On	a	quarterly	basis,	we	measure	the	fair	value	of	our	non-marketable	cost	method	investments,	indebtedness	carried	at	amortized	cost,	cost	method loans	receivable,	grants	receivable,	and	reverse	repurchase	agreements	with	original	maturities	greater	than	approximately	three	months;	however,	the assets	are	recorded	at	fair	value	only	when	an	impairment	charge	is	recognized.	The	carrying	amounts	and	fair	values	of	certain	financial	instruments	not recorded	at	fair	value	on	a	recurring	basis	at	the	end	of	each	period	were	as	follows:

|  | Carrying |  | Fair	Value	Measured	Using |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Amount | Level\t1 | Level\t2 | Level\t3 | Fair\tValue |
| Non-marketable\tcost\tmethod\tinvestments | $1,270 | $— | $— | $2,105 | $2,105 |
| Loans\treceivable | $267 | $— | $250 | $17 | $267 |
| Reverse\trepurchase\tagreements | $400 | $— | $400 | $— | $400 |
| Grants\treceivable | $416 | $— | $481 | $— | $481 |
| Long-term\tdebt | $13,165 | $10,937 | $2,601 | $— | $13,538 |
| Short-term\tdebt | $24 | $— | $24 | $— | $24 |
| NVIDIA\tCorporation\tcross-license\tagreement\tliability | $587 | $— | $597 | $— | $597 |

|  | Carrying |  | Fair	Value	Measured	Using |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Amount | Level\t1 | Level\t2 | Level\t3 | Fair\tValue |
| Non-marketable\tcost\tmethod\tinvestments | $1,202 | $— | $— | $1,766 | $1,766 |
| Loans\treceivable | $199 | $— | $150 | $48 | $198 |
| Reverse\trepurchase\tagreements | $50 | $— | $50 | $— | $50 |
| Grants\treceivable | $198 | $— | $205 | $— | $205 |
| Long-term\tdebt | $13,136 | $11,442 | $2,926 | $— | $14,368 |
| Short-term\tdebt | $48 | $— | $48 | $— | $48 |
| NVIDIA\tCorporation\tcross-license\tagreement\tliability | $875 | $— | $890 | $— | $890 |

As	of	December	28,	2013,	and	December	29,	2012,	the	unrealized	loss	position	of	our	non-marketable	cost	method	investments	was	insignificant.

Our	non-marketable	cost	method	investments	are	valued	using	the	market	and	income	approaches.	The	market	approach	includes	the	use	of	financial metrics	and	ratios	of	comparable	public	companies.	The	selection	of	comparable	companies	requires	management	judgment	and	is	based	on	a	number	of factors,	including	comparable	companies'	sizes,	growth	rates,	industries,	and	development	stages.	The	income	approach	includes	the	use	of	a	discounted cash	flow	model,	which	requires	significant	estimates	regarding	the	investees'	revenue,	costs,	and	discount	rates	based	on	the	risk	profile	of	comparable companies.	Estimates	of	revenue	and	costs	are	developed	using	available	market,	historical,	and	forecast	data.	The	valuation	of	these	non-marketable cost	method	investments	also	takes	into	account	variables	such	as	conditions	reflected	in	the	capital	markets,	recent	financing	activities	by	the	investees, the	investees'	capital	structure,	the	terms	of	the	investees'	issued	interests,	and	the	lack	of	marketability	of	the	investments.

The	carrying	amount	and	fair	value	of	loans	receivable	exclude	loans	measured	and	recorded	at	a	fair	value	of $805	million	as	of	December	28,	2013 ($780	million	as	of	December	29,	2012).	The	carrying	amount	and	fair	value	of	short-term	debt	exclude	drafts	payable.

The	fair	value	of	our	loans	receivable	and	reverse	repurchase	agreements,	including	those	held	at	fair	value,	is	determined	using	a	discounted	cash	flow model,	with	all	significant	inputs	derived	from	or	corroborated	with	observable	market	data,	such	as	LIBOR-based	yield	curves,	currency	spot	and	forward rates,	and	credit	ratings.	The	credit	quality	of	these	assets	remains	high,	with	credit	ratings	of	A+/A1	or	better	for	a	substantial	majority	of	our	loans receivable	and	reverse	repurchase	agreements	as	of	December	28,	2013.

The	fair	value	of	our	grants	receivable	is	determined	using	a	discounted	cash	flow	model,	which	discounts	future	cash	flows	using	an	appropriate	yield curve.	As	of	December	28,	2013,	and	December	29,	2012,	the	carrying	amount	of	our	grants	receivable	was	classified	within	other	current	assets	and other	long-term	assets,	as	applicable.

Our	long-term	debt	recognized	at	amortized	cost	is	comprised	of	our	senior	notes	and	our	convertible	debentures.	The	fair	value	of	our	senior	notes	is determined	using	active	market	prices,	and	it	is	therefore	classified	as	Level	1.	The	fair	value	of	our	convertible	long-term	debt	is	determined	using discounted	cash	flow	models	with	observable	market	inputs,	and	it	takes	into	consideration	variables	such	as	interest	rate	changes,	comparable	securities, subordination	discount,	and	credit-rating	changes,	and	it	is	therefore	classified	as	Level	2.

The	NVIDIA	Corporation	(NVIDIA)	cross-license	agreement	liability	in	the	preceding	table	was	incurred	as	a	result	of	entering	into	a	long-term	patent cross-license	agreement	with	NVIDIA	in	January	2011.	We	agreed	to	make	payments	to	NVIDIA	over	six	years.	As	of	December	28,	2013,	and December	29,	2012,	the	carrying	amount	of	the	liability	arising	from	the	agreement	was	classified	within	other	accrued	liabilities	and	other	long-term liabilities,	as	applicable.	The	fair	value	is	determined	using	a	discounted	cash	flow	model,	which	discounts	future	cash	flows	using	our	incremental borrowing	rates.

# Note	5:	Cash	and	Investments

Cash	and	investments	at	the	end	of	each	period	were	as	follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 |
| :--- | :--- | :--- |
| Available-for-sale\tinvestments | $18,086 | $14,001 |
| Cash | 854 | 593 |
| Equity\tmethod\tinvestments | 1,038 | 992 |
| Loans\treceivable | 1,072 | 979 |
| Non-marketable\tcost\tmethod\tinvestments | 1,270 | 1,202 |
| Reverse\trepurchase\tagreements | 800 | 2,850 |
| Trading\tassets | 8,441 | 5,685 |
| Total\tcash\tand\tinvestments | $31,561 | $26,302 |

In	the	third	quarter	of	2013,	we	sold	our	shares	in	Clearwire	Corporation,	which	had	been	accounted	for	as	available-for-sale	marketable	equity	securities, and	our	interest	in	Clearwire	Communications,	LLC	(Clearwire	LLC),	which	had	been	accounted	for	as	an	equity	method	investment.	In	total,	we	received proceeds	of	$470	million	on	these	transactions	and	recognized	a	gain	of	 $439	million,	which	is	included	in	gains	(losses)	on	equity	investments,	net	on	the consolidated	statements	of	income.	Proceeds	received	and	gains	recognized	for	each	investment	are	included	in	the	"Available-for-Sale	Investments"	and "Equity	Method	Investments"	sections	that	follow.

Available-for-sale	investments	at	the	end	of	each	period	were	as	follows:

|  |  | December	28,	2013 |  |  |  | December	29,	2012 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Adjusted\nCost | Gross\nUnrealized\nGains | Gross\nUnrealized\nLosses | Fair\nValue | Adjusted\nCost | Gross\nUnrealized\nGains | Gross\nUnrealized\nLosses | Fair\nValue |
| Asset-backed\tsecurities | $11 | $— | $(2) | $9 | $14 | $— | $(3) | $11 |
| Bank\tdeposits | 2,951 | 6 | (1) | 2,956 | 1,417 | 1 | — | 1,418 |
| Commercial\tpaper | 4,464 | — | — | 4,464 | 4,184 | 1 | — | 4,185 |
| Corporate\tbonds | 2,359 | 15 | (3) | 2,371 | 635 | 8 | (1) | 642 |
| Government\tbonds | 1,024 | — | — | 1,024 | 2,235 | — | — | 2,235 |
| Marketable\tequity\tsecurities | 3,340 | 2,881 | — | 6,221 | 3,356 | 1,069 | (1) | 4,424 |
| Money\tmarket\tfund\ndeposits | 1,042 | — | (1) | 1,041 | 1,086 | — | — | 1,086 |
| Total\tavailable-for-sale\ninvestments | $15,191 | $2,902 | $(7) | $18,086 | $12,927 | $1,079 | $(5) | $14,001 |

In	the	preceding	table,	government	bonds	include	bonds	issued	or	deemed	to	be	guaranteed	by	government	entities.	Government	bonds	include instruments	such	as	non-U.S.	government	bonds,	U.S.	agency	securities,	and	U.S.	Treasury	securities.	Bank	deposits	were	primarily	held	by	institutions outside	the	U.S.	as	of	December	28,	2013,	and	December	29,	2012.

During	the	third	quarter	of	2012,	we	purchased	ASML	Holding	N.V.	equity	securities	totaling $3.2	billion.	This	equity	interest	has	been	accounted	for	as	an available-for-sale	investment	and	is	included	as	marketable	equity	securities	in	the	preceding	table.

For	information	on	the	unrealized	holding	gains	(losses)	on	available-for-sale	investments	reclassified	out	of	accumulated	other	comprehensive	income into	the	consolidated	statements	of	income,	see	"Note	25:	Other	Comprehensive	Income	(Loss)."

We	sold	available-for-sale	investments	for	proceeds	of	$934	million	in	2013	($2.3	billion	in	2012	and	$9.1	billion	in	2011).	Proceeds	received	in	2013 included	$142	million	from	the	sale	of	our	shares	in	Clearwire	Corporation,	which	are	included	in	sales	of	available-for-sale	investments	within	investing activities	on	the	consolidated	statements	of	cash	flows.	Substantially	all	of	the	proceeds	in	2011	were	from	debt	investments	primarily	used	to	fund	our acquisition	of	McAfee.	The	gross	realized	gains	on	sales	of	available-for-sale	investments	were	$146	million	in	2013	($166	million	in	2012	and	$268	million in	2011).	In	2013,	we	recognized	a	gain	of	 $111	million	on	the	sale	of	our	shares	in	Clearwire	Corporation,	previously	included	as	marketable	equity securities	in	the	preceding	table.	We	determine	the	cost	of	an	investment	sold	on	an	average	cost	basis	at	the	individual	security	level.	Impairment charges	recognized	on	available-for-sale	investments	were	$14	million	in	2013	($36	million	in	2012	and	$73	million	in	2011).

The	amortized	cost	and	fair	value	of	available-for-sale	debt	investments,	by	contractual	maturity,	as	of December	28,	2013,	were	as	follows:

| (In	Millions) | Cost | Fair	Value |
| :--- | :--- | :--- |
| Due\tin\t1\tyear\tor\tless | $9,170 | $9,188 |
| Due\tin\t1–2\tyears | 979 | 978 |
| Due\tin\t2–5\tyears | 421 | 421 |
| Instruments\tnot\tdue\tat\ta\tsingle\tmaturity\tdate | 1,281 | 1,278 |
| Total | $11,851 | $11,865 |

Instruments	not	due	at	a	single	maturity	date	in	the	preceding	table	include	all	asset-backed	securities,	most	callable	government	bonds,	and	all	money market	fund	deposits.

# Equity	Method	Investments

Equity	method	investments,	classified	within	other	long-term	assets,	at	the	end	of	each	period	were	as	follows:

|  | December	28,	2013 |  | December	29,	2012 |  |
| :--- | :--- | :--- | :--- | :--- |
| (Dollars\tIn\tMillions) | Carrying\nValue | Ownership\nPercentage | Carrying\nValue | Ownership\nPercentage |
| IM\tFlash\tTechnologies,\tLLC | $646 | 49% | $642 | 49% |
| Intel-GE\tCare\tInnovations,\tLLC | 117 | 50% | 146 | 50% |
| Clearwire\tCommunications,\tLLC | — | —% | — | 6% |
| Other\tequity\tmethod\tinvestments | 275 |  | 204 |  |
| Total | $1,038 |  | $992 |  |

# IM	Flash	Technologies,	LLC	and	IM	Flash	Singapore,	LLP

Micron	Technology,	Inc.	(Micron)	and	Intel	formed	IM	Flash	Technologies,	LLC	(IMFT)	in	2006	and	IM	Flash	Singapore,	LLP	(IMFS)	in	2007	to manufacture	NAND	flash	memory	products	for	Micron	and	Intel.	During	the	second	quarter	of	2012,	we	entered	into	agreements	with	Micron	that	modified our	joint	venture	relationship	including	an	agreement	to	sell	our	ownership	interest	in	IMFS.	We	received	$605	million	in	the	second	quarter	of	2012	from the	sale	of	assets	of	IMFS	and	certain	assets	of	IMFT	to	Micron.

As	part	of	the	agreements	to	modify	our	joint	venture	relationship,	we	also	entered	into	an	amended	operating	agreement	for	IMFT.	This	amended operating	agreement	extends	the	term	of	IMFT	to	2024,	unless	earlier	terminated	under	certain	terms	and	conditions,	and	provides	that	IMFT	may manufacture	certain	emerging	memory	technologies	in	addition	to	NAND	flash	memory.	These	agreements	include	a	supply	agreement	for	Micron	to supply	us	with	NAND	flash	memory	products.	We	provided	approximately	$365	million	to	Micron	in	the	second	quarter	of	2012,	primarily	for	subsequent product	purchases	under	the	supply	agreement	with	Micron.	The	agreements	also	extend	and	expand	our	NAND	joint	development	program	with	Micron to	include	emerging	memory	technologies.	Additionally,	the	amended	agreement	provides	for	certain	rights	that,	beginning	in	2015,	will	enable	us	to	sell to	Micron,	or	enable	Micron	to	purchase	from	us,	our	interest	in	IMFT.	If	Intel	exercises	this	right,	Micron	would	set	the	closing	date	of	the	transaction within	two	years	following	such	election	and	could	elect	to	receive	financing	from	Intel	for	one	to	two	years.

IMFT	is	a	variable	interest	entity.	All	costs	of	the	IMFT	joint	venture	will	be	passed	on	to	Micron	and	Intel	pursuant	to	our	purchase	agreements.	Intel's portion	of	IMFT	costs,	primarily	related	to	product	purchases	and	production-related	services,	was	approximately	$380	million	in	2013	(approximately $705	million	in	2012	and	approximately	$985	million	in	2011	for	IMFT	and	IMFS).	Subsequent	to	the	sale	of	our	ownership	interest	in	IMFS	in	the	second quarter	of	2012,	we	no	longer	incur	costs	related	to	IMFS.	The	amount	due	to	IMFT	for	product	purchases	and	services	provided	was	approximately	$75 million	as	of	December	28,	2013	(approximately	$90	million	as	of	December	29,	2012).	IMFT	returned	$45	million	to	Intel	in	2013,	which	is	reflected	as	a return	of	equity	method	investment	within	investing	activities	on	the	consolidated	statements	of	cash	flows	($137	million	in	2012	and	$263	million	in	2011).

IMFT	depends	on	Micron	and	Intel	for	any	additional	cash	needs.	Our	known	maximum	exposure	to	loss	approximated	the	carrying	value	of	our investment	balance	in	IMFT,	which	was	$646	million	as	of	December	28,	2013.	Except	for	the	amount	due	to	IMFT	for	product	purchases	and	services, we	did	not	have	any	additional	liabilities	recognized	on	our	consolidated	balance	sheets	in	connection	with	our	interests	in	this	joint	venture	as	of December	28,	2013.	In	addition,	our	potential	future	losses	could	be	higher	than	the	carrying	amount	of	our	investment,	as	Intel	and	Micron	are	liable	for other	future	operating	costs	or	obligations	of	IMFT.	Future	cash	calls	could	also	increase	our	investment	balance	and	the	related	exposure	to	loss.	In addition,	because	we	are	currently	committed	to	purchasing	49%	of	IMFT's	production	output	and	production-related	services,	we	may	be	required	to purchase	products	at	a	cost	in	excess	of	realizable	value.

We	have	determined	that	we	do	not	have	the	characteristics	of	a	consolidating	investor	in	the	variable	interest	entity	and,	therefore,	we	account	for	our interest	in	IMFT	(and	accounted	for	our	prior	interest	in	IMFS)	using	the	equity	method	of	accounting.

# Intel-GE	Care	Innovations,	LLC

In	the	first	quarter	of	2011,	Intel	and	General	Electric	Company	(GE)	formed	Intel-GE	Care	Innovations,	LLC	(Care	Innovations),	an	equally	owned	joint venture	in	the	healthcare	industry,	that	focuses	on	independent	living	and	delivery	of	health-related	services	by	means	of	telecommunications.	The company	was	formed	by	combining	assets	of	GE	Healthcare's	Home	Health	division	and	Intel's	Digital	Health	Group.	As	a	result	of	forming	Care Innovations,	we	recognized	a	gain	of	$164	million	in	the	first	quarter	of	2011,	which	is	included	in	interest	and	other,	net	on	the	consolidated	statements	of income.

Care	Innovations	is	a	variable	interest	entity	and	depends	on	Intel	and	GE	for	any	additional	cash	needs.	Our	known	maximum	exposure	to	loss approximated	the	carrying	value	of	our	investment	balance	in	Care	Innovations,	which	was	$117	million	as	of	December	28,	2013.

Intel	and	GE	equally	share	the	power	to	direct	all	of	Care	Innovations'	activities	that	most	significantly	impact	its	economic	performance.	We	have determined	that	we	do	not	have	the	characteristics	of	a	consolidating	investor	in	the	variable	interest	entity	and,	therefore,	we	account	for	our	interest	in Care	Innovations	using	the	equity	method	of	accounting.

# Clearwire	Communications,	LLC

In	2008,	we	invested	in	Clearwire	LLC.	We	recognized	our	proportionate	share	of	losses	to	the	extent	that	our	investment	had	a	positive	carrying	value. We	recognized	equity	method	losses	of	$145	million	in	2011.	In	the	third	quarter	of	2013,	we	sold	our	interest	in	Clearwire	LLC	for	proceeds	of $328 million,	which	is	included	in	other	investing	within	investing	activities	on	the	consolidated	statements	of	cash	flows.	We	recognized	a	gain	on	the	sale	of our	interest	in	Clearwire	LLC	of	$328	million.

# Non-marketable	cost	method	investments

The	carrying	value	of	our	non-marketable	cost	method	investments	was	 $1.3	billion	as	of	December	28,	2013	($1.2	billion	as	of	December	29,	2012).	In 2013,	we	recognized	impairment	charges	of	 $103	million	on	non-marketable	cost	method	investments,	which	is	included	within	gains	(losses)	on	equity investments,	net	on	the	consolidated	statements	of	income	($104	million	in	2012	and	$56	million	in	2011).

As	of	December	28,	2013,	and	December	29,	2012,	all	of	our	trading	assets	were	marketable	debt	instruments.	Net	 losses	related	to	trading	assets	still held	at	the	reporting	date	were	$70	million	in	2013	(net	gains	of	$16	million	in	2012	and	net	losses	of	$71	million	in	2011).	Net	gains	on	the	related derivatives	were	$86	million	in	2013	(net	gains	of	$11	million	in	2012	and	$58	million	in	2011).

# Note	6:	Derivative	Financial	Instruments

Our	primary	objective	for	holding	derivative	financial	instruments	is	to	manage	currency	exchange	rate	risk	and	interest	rate	risk,	and,	to	a	lesser	extent, equity	market	risk	and	commodity	price	risk.	We	also	enter	into	master	netting	arrangements	with	counterparties	when	possible	to	mitigate	credit	risk	in derivative	transactions.	A	master	netting	arrangement	may	allow	counterparties	to	net	settle	amounts	owed	to	each	other	as	a	result	of	multiple,	separate derivative	transactions.	For	presentation	on	our	consolidated	balance	sheets,	we	do	not	offset	fair	value	amounts	recognized	for	derivative	instruments under	master	netting	arrangements.

# Currency	Exchange	Rate	Risk

We	are	exposed	to	currency	exchange	rate	risk	and	generally	hedge	our	exposures	with	currency	forward	contracts,	currency	interest	rate	swaps,	or currency	options.	Substantially	all	of	our	revenue	is	transacted	in	U.S.	dollars.	However,	a	significant	amount	of	our	operating	expenditures	and	capital purchases	is	incurred	in	or	exposed	to	other	currencies,	primarily	the	euro,	the	Japanese	yen,	and	the	Israeli	shekel.	We	have	established	balance	sheet and	forecasted	transaction	currency	risk	management	programs	to	protect	against	fluctuations	in	fair	value	and	the	volatility	of	the	functional	currency equivalent	of	future	cash	flows	caused	by	changes	in	exchange	rates.	Our	non-U.S.-dollar-denominated	investments	in	debt	instruments	and	loans receivable	are	generally	hedged	with	offsetting	currency	forward	contracts	or	currency	interest	rate	swaps.	We	may	also	hedge	foreign	currency	risk arising	from	funding	foreign	currency	denominated	forecasted	investments.	These	programs	reduce,	but	do	not	eliminate,	the	impact	of	currency exchange	movements.

# Our	currency	risk	management	programs	include:

•Currency	derivatives	with	cash	flow	hedge	accounting	designation	that	utilize	currency	forward	contracts	and	currency	options	to	hedge	exposures	to the	variability	in	the	U.S.-dollar	equivalent	of	anticipated	non-U.S.-dollar-denominated	cash	flows.	These	instruments	generally	mature	within 12	months.	For	these	derivatives,	we	report	the	after-tax	gain	or	loss	from	the	effective	portion	of	the	hedge	as	a	component	of	accumulated	other comprehensive	income	(loss),	and	we	reclassify	it	into	earnings	in	the	same	period	or	periods	in	which	the	hedged	transaction	affects	earnings,	and	in the	same	line	item	on	the	consolidated	statements	of	income	as	the	impact	of	the	hedged	transaction.

•Currency	derivatives	without	hedge	accounting	designation	that	utilize	currency	forward	contracts	or	currency	interest	rate	swaps	to	economically hedge	the	functional	currency	equivalent	cash	flows	of	recognized	monetary	assets	and	liabilities,	non-U.S.-dollar-denominated	debt	instruments classified	as	trading	assets,	and	hedges	of	non-U.S.-dollar-denominated	loans	receivable	recognized	at	fair	value.	The	majority	of	these	instruments mature	within	12	months.	Changes	in	the	functional	currency	equivalent	cash	flows	of	the	underlying	assets	and	liabilities	are	approximately	offset	by the	changes	in	fair	value	of	the	related	derivatives.	We	record	net	gains	or	losses	in	the	line	item	on	the	consolidated	statements	of	income	most closely	associated	with	the	related	exposures,	primarily	in	interest	and	other,	net,	except	for	equity-related	gains	or	losses,	which	we	primarily	record in	gains	(losses)	on	equity	investments,	net.

# Interest	Rate	Risk

Our	primary	objective	for	holding	investments	in	debt	instruments	is	to	preserve	principal	while	maximizing	yields.	We	generally	swap	the	returns	on	our investments	in	fixed-rate	debt	instruments	with	remaining	maturities	longer	than	six	months	into	U.S.	dollar	three-month	LIBOR-based	returns,	unless management	specifically	approves	otherwise.	These	swaps	are	settled	at	various	interest	payment	times	involving	cash	payments	at	each	interest	and principal	payment	date,	with	the	majority	of	the	contracts	having	quarterly	payments.

# Our	interest	rate	risk	management	programs	include:

•Interest	rate	derivatives	with	cash	flow	hedge	accounting	designation	that	utilize	interest	rate	swap	agreements	to	modify	the	interest	characteristics	of debt	instruments.	For	these	derivatives,	we	report	the	after-tax	gain	or	loss	from	the	effective	portion	of	the	hedge	as	a	component	of	accumulated other	comprehensive	income	(loss),	and	we	reclassify	it	into	earnings	in	the	same	period	or	periods	in	which	the	hedged	transaction	affects	earnings, and	in	the	same	line	item	on	the	consolidated	statements	of	income	as	the	impact	of	the	hedged	transaction.

•Interest	rate	derivatives	without	hedge	accounting	designation	that	utilize	interest	rate	swaps	and	currency	interest	rate	swaps	in	economic	hedging transactions,	including	hedges	of	non-U.S.-dollar-denominated	debt	instruments	classified	as	trading	assets	and	hedges	of	non-U.S.-dollar- denominated	loans	receivable	recognized	at	fair	value.	Floating	interest	rates	on	the	swaps	are	reset	on	a	quarterly	basis.	Changes	in	fair	value	of	the debt	instruments	classified	as	trading	assets	and	loans	receivable	recognized	at	fair	value	are	generally	offset	by	changes	in	fair	value	of	the	related derivatives,	both	of	which	are	recorded	in	interest	and	other,	net.

# Equity	Market	Risk

Our	investments	include	marketable	equity	securities	and	equity	derivative	instruments.	We	typically	do	not	attempt	to	reduce	or	eliminate	our	equity market	exposure	through	hedging	activities	at	the	inception	of	the	investment.	Before	we	enter	into	hedge	arrangements,	we	evaluate	legal,	market,	and economic	factors,	as	well	as	the	expected	timing	of	disposal	to	determine	whether	hedging	is	appropriate.	Our	equity	market	risk	management	program may	include	equity	derivatives	with	or	without	hedge	accounting	designation	that	utilize	warrants,	equity	options,	or	other	equity	derivatives.	We	recognize changes	in	the	fair	value	of	such	derivatives	in	gains	(losses)	on	equity	investments,	net.	We	also	utilize	total	return	swaps	to	offset	changes	in	liabilities related	to	the	equity	market	risks	of	certain	deferred	compensation	arrangements.	Gains	and	losses	from	changes	in	fair	value	of	these	total	return	swaps are	generally	offset	by	the	losses	and	gains	on	the	related	liabilities,	both	of	which	are	recorded	in	cost	of	sales	and	operating	expenses.

Deferred	compensation	liabilities	were	$1.1	billion	as	of	December	28,	2013	($859	million	as	of	December	29,	2012),	and	are	included	in	other	accrued liabilities.

In	2010,	we	sold	our	ownership	interest	in	Numonyx	B.V.	to	Micron	for	consideration	consisting	of	shares	of	Micron.	We	also	entered	into	equity	option transactions	that	economically	hedged	a	portion	of	the	ownership	interest	in	Micron	that	we	acquired.	In	the	second	quarter	of	2011,	we	sold	our	remaining ownership	interest	in	Micron	and	the	related	equity	options	matured.

# Commodity	Price	Risk

We	operate	facilities	that	consume	commodities	and	have	established	forecasted	transaction	risk	management	programs	to	protect	against	fluctuations	in fair	value	and	the	volatility	of	future	cash	flows	caused	by	changes	in	commodity	prices,	such	as	those	for	natural	gas.	These	programs	reduce,	but	do	not always	eliminate,	the	impact	of	commodity	price	movements.

Our	commodity	price	risk	management	program	includes	commodity	derivatives	with	cash	flow	hedge	accounting	designation	that	utilize	commodity	swap contracts	to	hedge	future	cash	flow	exposures	to	the	variability	in	commodity	prices.	These	instruments	generally	mature	within	12	months.	For	these derivatives,	we	report	the	after-tax	gain	(loss)	from	the	effective	portion	of	the	hedge	as	a	component	of	accumulated	other	comprehensive	income	(loss) and	reclassify	it	into	earnings	in	the	same	period	or	periods	in	which	the	hedged	transaction	affects	earnings,	and	in	the	same	line	item	on	the consolidated	statements	of	income	as	the	impact	of	the	hedged	transaction.

# Volume	of	Derivative	Activity

Total	gross	notional	amounts	for	outstanding	derivatives	(recorded	at	fair	value)	at	the	end	of	each	period	were	as	follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 | Dec	31,<br>2011 |
| :--- | :--- | :--- | :--- |
| Currency\tforwards | $13,404 | $13,117 | $11,203 |
| Currency\tinterest\trate\tswaps | 4,377 | 2,711 | 1,650 |
| Embedded\tdebt\tderivatives | 3,600 | 3,600 | 3,600 |
| Interest\trate\tswaps | 1,377 | 1,101 | 1,837 |
| Total\treturn\tswaps | 914 | 807 | 761 |
| Other | 67 | 127 | 182 |
| Total | $23,739 | $21,463 | $19,233 |

The	gross	notional	amounts	for	currency	forwards	and	currency	interest	rate	swaps	(presented	by	currency)	at	the	end	of	each	period	were	as	follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 | Dec	31,<br>2011 |
| :--- | :--- | :--- | :--- |
| British\tpound\tsterling | $549 | $308 | $459 |
| Chinese\tyuan | 1,116 | 647 | 688 |
| Euro | 6,874 | 5,994 | 3,904 |
| Israeli\tshekel | 2,244 | 2,256 | 2,168 |
| Japanese\tyen | 4,116 | 4,389 | 3,477 |
| Malaysian\tringgit | 506 | 442 | 805 |
| Swiss\tfranc | 1,189 | 657 | 209 |
| Other | 1,187 | 1,135 | 1,143 |
| Total | $17,781 | $15,828 | $12,853 |

# Fair	Value	of	Derivative	Instruments	in	the	Consolidated	Balance	Sheets

The	fair	value	of	our	derivative	instruments	at	the	end	of	each	period	were	as	follows:

|  |  | December	28,	2013 | December	28,	2013 |  |  | December	29,	2012 | December	29,	2012 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Other\nCurrent\nAssets | Other\nLong-Term\nAssets | Other\nAccrued\nLiabilities | Other\nLong-Term\nLiabilities | Other\nCurrent\nAssets | Other\nLong-Term\nAssets | Other\nAccrued\nLiabilities | Other\nLong-Term\nLiabilities |
| Derivatives\tdesignated\tas\thedging\ninstruments: |  |  |  |  |  |  |  |  |
| Currency\tforwards | $114 | $1 | $118 | $2 | $91 | $2 | $127 | $— |
| Total\tderivatives\tdesignated\tas\nhedging\tinstruments | $114 | $1 | $118 | $2 | $91 | $2 | $127 | $— |
| Derivatives\tnot\tdesignated\tas\thedging\ninstruments: |  |  |  |  |  |  |  |  |
| Currency\tforwards | $66 | $— | $63 | $— | $85 | $— | $58 | $— |
| Currency\tinterest\trate\tswaps | 124 | 6 | 163 | 29 | 33 | 18 | 72 | 14 |
| Embedded\tdebt\tderivatives | — | — | — | 19 | — | — | — | 6 |
| Interest\trate\tswaps | 5 | — | 28 | — | — | — | 34 | — |
| Total\treturn\tswaps | 48 | — | — | — | 11 | — | — | — |
| Other | — | 29 | — | — | 1 | 18 | 1 | — |
| Total\tderivatives\tnot\tdesignated\tas\nhedging\tinstruments | $243 | $35 | $254 | $48 | $130 | $36 | $165 | $20 |
| Total\tderivatives | $357 | $36 | $372 | $50 | $221 | $38 | $292 | $20 |

# Derivatives	in	Cash	Flow	Hedging	Relationships

The	before-tax	gains	(losses),	attributed	to	the	effective	portion	of	cash	flow	hedges,	recognized	in	other	comprehensive	income	(loss)	for	each	period were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Currency\tforwards | $(167) | $4 | $20 |
| Other | 1 | 9 | — |
| Total | $(166) | $13 | $20 |

Gains	and	losses	on	derivative	instruments	in	cash	flow	hedging	relationships	related	to	hedge	ineffectiveness	and	amounts	excluded	from	effectiveness testing	were	insignificant	during	all	periods	presented	in	the	preceding	tables.	Additionally,	for	all	periods	presented,	there	was	an	insignificant	impact	on results	of	operations	from	discontinued	cash	flow	hedges,	which	arises	when	forecasted	transactions	are	probable	of	not	occurring.

# Derivatives	Not	Designated	as	Hedging	Instruments

The	effects	of	derivative	instruments	not	designated	as	hedging	instruments	on	the	consolidated	statements	of	income	for	each	period	were	as	follows:

| (In	Millions) | Location	of	Gains	(Losses)<br>Recognized	in	Income	on	Derivatives | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- |
| Currency\tforwards | Interest\tand\tother,\tnet | $44 | $3 | $58 |
| Currency\tinterest\trate\tswaps | Interest\tand\tother,\tnet | 29 | (71) | (17) |
| Equity\toptions | \t Gains\t(losses)\ton\tequity\tinvestments,\tnet | 1 | (1) | (67) |
| Interest\trate\tswaps | Interest\tand\tother,\tnet | — | 31 | (26) |
| Total\treturn\tswaps | Various | 140 | 77 | (13) |
| Other | \t Gains\t(losses)\ton\tequity\tinvestments,\tnet | 5 | (7) | 4 |
| Other | Interest\tand\tother,\tnet | — | 3 | — |
| Total |  | $219 | $35 | $(61) |

# Note	7:	Concentrations	of	Credit	Risk

Financial	instruments	that	potentially	subject	us	to	concentrations	of	credit	risk	consist	principally	of	investments	in	debt	instruments,	derivative	financial instruments,	loans	receivable,	and	trade	receivables.	When	possible,	we	enter	into	master	netting	arrangements	with	counterparties	to	mitigate	credit	risk in	derivative	transactions.	A	master	netting	arrangement	may	allow	counterparties	to	net	settle	amounts	owed	to	each	other	as	a	result	of	multiple, separate	derivative	transactions.	For	presentation	on	our	consolidated	balance	sheets,	we	do	not	offset	fair	value	amounts	recognized	for	derivative instruments	under	master	netting	arrangements.

We	generally	place	investments	with	high-credit-quality	counterparties	and,	by	policy,	we	limit	the	amount	of	credit	exposure	to	any	one	counterparty based	on	our	analysis	of	that	counterparty's	relative	credit	standing.	Most	of	our	investments	in	debt	instruments	are	in	 A/A2	or	better	rated	issuances,	and the	majority	of	the	issuances	are	rated	 AA-/Aa3	or	better.	Our	investment	policy	requires	substantially	all	investments	with	original	maturities	at	the	time	of investment	of	up	to	six	months	to	be	rated	at	least	A-2/P-2	by	Standard	&	Poor's/Moody's,	and	specifies	a	higher	minimum	rating	for	investments	with longer	maturities.	For	instance,	investments	with	maturities	of	greater	than	three	years	generally	require	a	minimum	rating	of	AA-/Aa3	at	the	time	of investment.	Government	regulations	imposed	on	investment	alternatives	of	our	non-U.S.	subsidiaries,	or	the	absence	of	A	rated	counterparties	in	certain countries,	result	in	some	minor	exceptions.	Credit-rating	criteria	for	derivative	instruments	are	similar	to	those	for	other	investments.	Due	to	master	netting arrangements,	the	amounts	subject	to	credit	risk	related	to	derivative	instruments	are	generally	limited	to	the	amounts,	if	any,	by	which	the	counterparty's obligations	exceed	our	obligations	with	that	counterparty.	As	of	December	28,	2013,	our	total	credit	exposure	to	any	single	counterparty,	excluding	Japan government	bonds,	did	not	exceed	$750	million.	We	obtain	and	secure	available	collateral	from	counterparties	against	obligations,	including	securities lending	transactions,	when	we	deem	it	appropriate.

A	substantial	majority	of	our	trade	receivables	are	derived	from	sales	to	original	equipment	manufacturers	and	original	design	manufacturers.	We	also have	accounts	receivable	derived	from	sales	to	industrial	and	retail	distributors.	Our	three	largest	customers	accounted	for	44%	of	net	revenue	for	2013 (43%	for	2012	and	2011).	Additionally,	these	three	largest	customers	accounted	for	 34%	of	our	accounts	receivable	as	of	 December	28,	2013	(33%	as	of December	29,	2012).	We	believe	that	the	receivable	balances	from	these	largest	customers	do	not	represent	a	significant	credit	risk	based	on	cash	flow forecasts,	balance	sheet	analysis,	and	past	collection	experience.

We	have	adopted	credit	policies	and	standards	intended	to	accommodate	industry	growth	and	inherent	risk.	We	believe	that	credit	risks	are	moderated	by the	financial	stability	of	our	major	customers.	We	assess	credit	risk	through	quantitative	and	qualitative	analysis,	and	from	this	analysis,	we	establish	credit limits	and	determine	whether	we	will	seek	to	use	one	or	more	credit	support	devices,	such	as	obtaining	a	parent	guarantee	or	standby	letter	of	credit,	or obtaining	credit	insurance.

# Note	8:	Acquisitions

# 2013	Acquisitions

During	2013,	we	completed	12	acquisitions	qualifying	as	business	combinations	in	exchange	for	aggregate	net	cash	consideration	of	 $925	million.	Most	of the	consideration	was	allocated	to	goodwill	and	acquisition-related	developed	technology	intangible	assets.	Included	in	these	acquisitions	is	our acquisition	of	Stonesoft	Oyj	(Stonesoft)	to	expand	our	network	security	solutions,	specifically	addressing	next	generation	firewall	products.	We	acquired Stonesoft	in	the	third	quarter	of	2013	for	net	cash	consideration	of	$381	million,	substantially	all	of	which	was	allocated	to	goodwill	and	acquisition-related developed	technology	intangible	assets.	Stonesoft's	operating	results	are	included	in	our	software	and	services	operating	segments.	For	information	on the	assignment	of	goodwill	to	our	operating	segments	for	our	acquisitions,	see	"Note	10:	Goodwill,"	and	for	information	on	the	classification	of	intangible assets,	see	"Note	11:	Identified	Intangible	Assets."	The	completed	acquisitions	in	2013,	both	individually	and	in	the	aggregate,	were	not	significant	to	our consolidated	results	of	operations.

During	2012,	we	completed	15	acquisitions	qualifying	as	business	combinations	in	exchange	for	aggregate	net	cash	consideration	of	 $638	million. Substantially	all	of	the	consideration	was	allocated	to	goodwill	and	acquisition-related	developed	technology	intangible	assets.	The	completed	acquisitions in	2012,	both	individually	and	in	the	aggregate,	were	not	significant	to	our	consolidated	results	of	operations.

On	February	28,	2011,	we	completed	the	acquisition	of	McAfee	by	acquiring	all	issued	and	outstanding	common	shares	in	exchange	for	cash.	The acquired	company	continues	to	operate	as	McAfee	and	offers	products	for	endpoint	security,	network	and	content	security,	risk	and	compliance,	and consumer	and	mobile	security.	In	addition	to	managing	the	existing	McAfee	business,	the	objective	of	the	acquisition	was	to	accelerate	and	enhance Intel's	combination	of	hardware	and	software	security	solutions,	thereby	improving	the	overall	security	of	our	platforms.

Total	consideration	to	acquire	McAfee	was	 $6.7	billion	(net	of	$943	million	of	cash	and	cash	equivalents	acquired)	and	comprised	the	following:

| (In	Millions) |  |
| :--- | :--- |
| Cash | $6,652 |
| Share-based\tawards\tassumed | 48 |
| Total | $6,700 |
| The\tfair\tvalue\tof\tthe\tassets\tacquired\tand\tliabilities\tassumed\tby\tmajor\tclass\tin\tthe\tacquisition\tof\tMcAfee\twas\trecognized\tas\tfollows: |  |
| (In\tMillions) |  |
| Marketable\tdebt\tsecurities | $329 |
| Goodwill | 4,299 |
| Identified\tintangible\tassets | 3,552 |
| Deferred\ttax\tassets | 738 |
| Other\tassets | 417 |
| Deferred\tincome | (1,049) |
| Deferred\ttax\tliabilities | (1,191) |
| Other\tliabilities | (395) |
| Total | $6,700 |

The	goodwill	of	$4.3	billion	arising	from	the	acquisition	is	primarily	attributed	to	synergies	to	enable	a	single	company	to	combine	security	and	hardware for	the	protection	of	online	devices,	as	well	as	the	assembled	workforce	of	McAfee.	Substantially	all	of	the	goodwill	recognized	is	not	deductible	for	tax purposes.	For	information	on	the	assignment	of	goodwill	to	our	operating	segments	for	the	acquisition,	see	"Note	10:	Goodwill."

The	identified	intangible	assets	assumed	in	the	acquisition	of	McAfee	were	recognized	as	follows	based	upon	their	fair	value	as	of	February	28,	2011:

|  |  | Estimated | Estimated | Estimated |
| :--- | :--- | :--- | :--- | :--- |
|  | Fair\tValue\n(In\tMillions) | Useful\tLife\n(In\tYears) | Useful\tLife\n(In\tYears) | Useful\tLife\n(In\tYears) |
| Developed\ttechnology | $1,221 |  | 4 |  |
| Customer\trelationships | 1,418 | 2 | – | 7 |
| Total\tidentified\tintangible\tassets\tsubject\tto\tamortization | $2,639 |  |  |  |
| In-process\tresearch\tand\tdevelopment | 92 |  |  |  |
| Trade\tnames | 821 |  |  |  |
| Total\tidentified\tintangible\tassets | $3,552 |  |  |  |

Acquired	developed	technology	represents	the	fair	value	of	McAfee	products	that	have	reached	technological	feasibility	and	were	part	of	McAfee's	product offerings	at	the	date	of	acquisition.	Customer	relationships	represent	the	fair	value	of	the	underlying	relationships	and	agreements	with	McAfee's customers.	In-process	R&D	represents	the	fair	value	of	incomplete	McAfee	R&D	projects	that	had	not	reached	technological	feasibility	as	of	the	date	of acquisition.	Incremental	costs	incurred	for	those	projects	are	expensed	as	incurred	in	R&D.	Since	the	acquisition	was	completed,	most	of	the	projects have	been	completed	and	the	associated	costs	are	being	amortized.	Trade	names	are	indefinite-lived	intangible	assets	and	represent	the	fair	value	of brand	and	name	recognition	associated	with	the	marketing	of	McAfee's	products	and	services.

# Other	2011	Acquisitions

During	2011,	in	addition	to	the	McAfee	acquisition,	we	completed	 13	acquisitions	qualifying	as	business	combinations	in	exchange	for	total	consideration of	$2.1	billion,	substantially	all	cash	consideration.	Total	net	cash	consideration	to	acquire	the	Wireless	Solutions	(WLS)	business	of	Infineon	Technologies AG,	which	operated	as	Intel	Mobile	Communications	(IMC),	was	$1.4	billion.	The	WLS	business	offers	mobile	phone	components	such	as	baseband processors,	radio	frequency	transceivers,	and	power	management	integrated	circuits.	In	addition	to	managing	the	existing	WLS	business,	the	objective	of the	acquisition	was	to	provide	solutions	that	enable	wireless	connectivity	for	a	broad	range	of	computing	applications.	In	2013,	we	completed	a reorganization	of	IMC	into	our	Multi-Comm	and	existing	Phone	Group	operating	segments,	see	"Note	27:	Operating	Segments	and	Geographic Information."

The	fair	value	of	the	assets	acquired	and	liabilities	assumed	by	major	class	in	the	acquisitions	completed	during	2011,	excluding	McAfee,	was	allocated	as follows:

| (In	Millions) |  |
| :--- | :--- |
| Fair\tvalue\tof\tnet\ttangible\tassets\tacquired | $206 |
| Goodwill | 517 |
| Identified\tintangible\tassets | 1,409 |
| Total | $2,132 |

For	information	on	the	assignment	of	goodwill	to	our	operating	segments	for	the	acquisitions,	see	" Note	10:	Goodwill."

The	identified	intangible	assets	assumed	in	the	acquisitions	completed	during	2011,	excluding	McAfee,	were	recognized	as	follows:

|  |  | Estimated | Estimated | Estimated |
| :--- | :--- | :--- | :--- | :--- |
|  | Fair\tValue\n(In\tMillions) | Useful\tLife\n(In\tYears) | Useful\tLife\n(In\tYears) | Useful\tLife\n(In\tYears) |
| Developed\ttechnology | $1,102 | 3 | – | 9 |
| Customer\trelationships | 144 | 5 | – | 8 |
| Other\tintangible\tassets | 44 | 2 | – | 7 |
| Total\tidentified\tintangible\tassets\tsubject\tto\tamortization | $1,290 |  |  |  |
| In-process\tresearch\tand\tdevelopment | 119 |  |  |  |
| Total\tidentified\tintangible\tassets | $1,409 |  |  |  |

Acquired	developed	technology	represents	the	fair	value	of	the	acquirees'	products	that	have	reached	technological	feasibility	and	are	a	part	of	the acquirees'	product	lines	at	the	time	acquired.	Customer	relationships	represent	the	fair	value	of	the	underlying	relationships	and	agreements	with	the acquirees'	customers.	In-process	R&D	represents	the	fair	value	of	incomplete	R&D	projects	that	had	not	reached	technological	feasibility	as	of	the	date	of acquisition.	Since	the	acquisitions	were	completed,	most	of	the	projects	have	been	completed	and	the	associated	costs	are	being	amortized.

# Actual	and	Pro	Forma	Results	of	Acquirees

Net	revenue	and	net	income	attributable	to	acquisitions	completed	during	2011	have	been	included	in	our	consolidated	statements	of	income	from	their respective	acquisition	dates.	The	acquisitions	completed	during	2011	were	not	individually	significant	to	our	consolidated	results	of	operations;	however, they	were	significant	in	the	aggregate.	During	2011,	the	results	of	the	businesses	acquired	in	2011	contributed	approximately	$3.6	billion	to	our	net revenue	and	reduced	our	net	income	by	approximately	$275	million;	substantially	all	of	these	impacts	were	attributable	to	McAfee	and	the	former	IMC	and include	the	impacts	of	the	amortization	of	acquired	identified	intangible	assets.

McAfee	is	a	non-reportable	operating	segment	and	is	aggregated	with	similar	non-reportable	operating	segments	within	the	software	and	services operating	segments	category	for	segment	reporting	purposes.	IMC	has	been	reorganized	into	our	Multi-Comm	and	existing	Phone	Group	operating segments	which	are	non-reportable	operating	segments	and	are	aggregated	with	similar	non-reportable	operating	segments	within	the	other	Intel architecture	(Other	IA)	operating	segments	category	for	segment	reporting	purposes.	For	further	information,	see	"Note	27:	Operating	Segments	and Geographic	Information."

The	unaudited	pro	forma	financial	results	for	2011	combine	the	historical	results	of	Intel	for	2011	along	with	the	historical	results	of	the	businesses acquired	during	2011.	The	results	include	the	effects	of	pro	forma	adjustments	as	if	businesses	acquired	in	2011	were	acquired	on	December	27,	2009.

The	unaudited	pro	forma	financial	results	presented	below	do	not	include	any	anticipated	synergies	or	other	expected	benefits	of	the	acquisitions.	This	is presented	for	informational	purposes	only	and	is	not	indicative	of	future	operations	or	results	that	would	have	been	achieved	had	the	acquisitions	been completed	as	of	December	27,	2009.

# Note	9:	Divestitures

In	the	first	quarter	of	2011,	we	completed	the	divestiture	of	our	Digital	Health	Group	by	entering	into	an	agreement	with	GE	to	form	an	equally	owned	joint venture	to	create	a	new	healthcare	company	focused	on	independent	living	and	delivery	of	health-related	services	via	telecommunications.	The	new company,	Care	Innovations,	was	formed	by	combining	assets	of	GE	Healthcare's	Home	Health	division	and	Intel's	Digital	Health	Group.	During	the	first quarter	of	2011,	as	a	result	of	the	formation	of	Care	Innovations,	we	recognized	a	gain	of	$164	million,	within	interest	and	other,	net.	For	further information,	see	"Note	5:	Cash	and	Investments."

# Note	10:	Goodwill

Goodwill	activity	for	each	period	was	as	follows:

| (In	Millions) | PC	Client	Group | Data	Center	Group | Architecture<br>Operating<br>Segments | Software	and<br>Services	Operating<br>Segments | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2011 | $2,918 | $1,553 | $844 | $3,939 | $9,254 |
| Additions\tdue\tto\tacquisitions | 44 | 286 | 78 | 44 | 452 |
| Impairments | — | — | (6) | — | (6) |
| Effect\tof\texchange\trate\tfluctuations | — | — | — | 10 | 10 |
| December\t29,\t2012 | $2,962 | $1,839 | $916 | $3,993 | $9,710 |
| Additions\tdue\tto\tacquisitions | 62 | 14 | 171 | 504 | 751 |
| Transfers | 34 | (22) | (12) | — | — |
| Effect\tof\texchange\trate\tfluctuations | — | — | — | 52 | 52 |
| December\t28,\t2013 | $3,058 | $1,831 | $1,075 | $4,549 | $10,513 |

In	2013,	we	completed	a	reorganization	of	IMC	into	our	Multi-Comm	and	existing	Phone	Group	operating	segments.	Goodwill	related	to	the	former	IMC was	allocated	between	Multi-Comm	and	the	Phone	Group	within	the	Other	IA	operating	segments.	Also	in	2013,	we	completed	a	reorganization	that transferred	a	portion	of	our	wired	connectivity	business	formerly	included	within	the	Data	Center	Group	(DCG)	to	the	PC	Client	Group	(PCCG).	Due	to	this reorganization,	goodwill	was	transferred	from	DCG	to	PCCG.

In	2012,	we	reorganized	and	allocated	goodwill	from	the	Netbook	and	Tablet	Group	into	three	operating	segments:	Netbook	Group,	Tablet	Group,	and Service	Provider	Group.	These	three	new	operating	segments	are	still	included	in	the	Other	IA	operating	segments.	Additionally,	the	former	Ultra-Mobility Group	is	now	the	Phone	Group.

For	further	information	on	these	reorganizations,	see	"Note	27:	Operating	Segments	and	Geographic	Information."

During	the	fourth	quarters	of	2013,	2012,	and	2011,	we	completed	our	annual	impairment	assessments	and	we	concluded	that	goodwill	was	not	impaired in	any	of	these	years.	The	accumulated	impairment	losses	as	of	December	28,	2013,	were	$719	million:	$346	million	associated	with	PCCG,	$275	million associated	with	DCG,	and	$98	million	associated	with	Other	IA	operating	segments.

# Note	11:	Identified	Intangible	Assets

Identified	intangible	assets	at	the	end	of	 December	28,	2013,	were	as	follows:

| (In	Millions) | Gross<br>Assets | Accumulated<br>Amortization | Net |
| :--- | :--- | :--- | :--- |
| Acquisition-related\tdeveloped\ttechnology | $2,922 | $(1,691) | $1,231 |
| Acquisition-related\tcustomer\trelationships | 1,760 | (828) | 932 |
| Acquisition-related\ttrade\tnames | 65 | (44) | 21 |
| Licensed\ttechnology\tand\tpatents | 3,093 | (974) | 2,119 |
| Identified\tintangible\tassets\tsubject\tto\tamortization | 7,840 | (3,537) | 4,303 |
| Acquisition-related\ttrade\tnames | 818 | — | 818 |
| Other\tintangible\tassets | 29 | — | 29 |
| Identified\tintangible\tassets\tnot\tsubject\tto\tamortization | 847 | — | 847 |
| Total\tidentified\tintangible\tassets | $8,687 | $(3,537) | $5,150 |

As	a	result	of	our	acquisitions	in	2013,	we	recorded	acquisition-related	developed	technology	of	 $114	million	with	a	weighted	average	useful	life	of five years	and	acquisition-related	customer	relationships	of	$60	million	with	a	weighted	average	useful	life	of	 seven	years.	During	2013,	we	purchased licensed	technology	and	patents	of	$36	million	with	a	weighted	average	useful	life	of	 10	years.

| (In	Millions) | Gross<br>Assets | Accumulated<br>Amortization | Net |
| :--- | :--- | :--- | :--- |
| Acquisition-related\tdeveloped\ttechnology | $2,778 | $(1,116) | $1,662 |
| Acquisition-related\tcustomer\trelationships | 1,712 | (551) | 1,161 |
| Acquisition-related\ttrade\tnames | 68 | (33) | 35 |
| Licensed\ttechnology\tand\tpatents | 2,986 | (699) | 2,287 |
| Other\tintangible\tassets | 238 | (86) | 152 |
| Identified\tintangible\tassets\tsubject\tto\tamortization | 7,782 | (2,485) | 5,297 |
| Acquisition-related\ttrade\tnames | 809 | — | 809 |
| Other\tintangible\tassets | 129 | — | 129 |
| Identified\tintangible\tassets\tnot\tsubject\tto\tamortization | 938 | — | 938 |
| Total\tidentified\tintangible\tassets | $8,720 | $(2,485) | $6,235 |

As	a	result	of	our	acquisitions	in	2012,	we	recorded	acquisition-related	developed	technology	of	 $168	million	with	a	weighted	average	useful	life	of	 10 years.	During	2012,	we	purchased	licensed	technology	and	patents	of	$815	million	with	a	weighted	average	useful	life	of	 nine	years,	including	wireless patents	purchased	from	InterDigital,	Inc.	for	$375	million	to	be	amortized	over	approximately	10	years.	Additionally,	we	recorded	other	intangible	assets subject	to	amortization	of	$238	million	associated	with	customer	relationships,	which	was	fully	amortized	in	2013.

In	January	2011,	we	entered	into	a	long-term	patent	cross-license	agreement	with	NVIDIA.	Under	the	agreement,	we	received	a	license	to	all	of	NVIDIA's patents	with	a	capture	period	that	runs	through	March	2017	while	NVIDIA	products	are	licensed	to	our	patents,	subject	to	exclusions	for	x86	products, certain	chipsets,	and	certain	flash	memory	technology	products.	The	agreement	also	included	settlement	of	the	existing	litigation	between	the	companies, as	well	as	broad	mutual	general	releases.	We	agreed	to	make	payments	totaling	$1.5	billion	to	NVIDIA	over	six	years	($300	million	in	each	of	January 2011,	2012,	and	2013;	and	$200	million	in	each	of	January	2014,	2015,	and	2016),	which	resulted	in	a	liability	totaling	approximately	 $1.4	billion,	on	a discounted	basis.	In	the	fourth	quarter	of	2010,	we	recognized	an	expense	of	$100	million	related	to	the	litigation	settlement.	In	the	first	quarter	of	2011, we	recognized	the	remaining	amount	of	$1.3	billion	as	licensed	technology,	which	will	be	amortized	into	cost	of	sales	over	its	estimated	useful	life	of 17 years.	The	initial	recognition	of	the	intangible	asset	and	associated	liability	for	future	payments	to	NVIDIA	was	treated	as	a	non-cash	transaction	and, therefore,	had	no	impact	on	our	consolidated	statements	of	cash	flows.	Future	payments	are	treated	as	cash	used	for	financing	activities.	As	of December	28,	2013,	the	remaining	liability	of	$587	million	is	classified	within	other	accrued	liabilities	and	other	long-term	liabilities,	based	on	the	expected timing	of	the	underlying	payments.

We	recorded	amortization	expense	on	the	consolidated	statements	of	income	as	follows:	amortization	of	acquisition-related	developed	technology	and licensed	technology	and	patents	is	included	in	cost	of	sales,	amortization	of	acquisition-related	customer	relationships	and	trade	names	is	included	in amortization	of	acquisition-related	intangibles,	and	amortization	of	other	intangible	assets	is	recorded	as	a	reduction	of	revenue.

Amortization	expenses	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Acquisition-related\tdeveloped\ttechnology | $576 | $557 | $482 |
| Acquisition-related\tcustomer\trelationships | 279 | 296 | 250 |
| Acquisition-related\ttrade\tnames | 12 | 12 | 10 |
| Licensed\ttechnology\tand\tpatents | 272 | 214 | 181 |
| Other\tintangible\tassets | 103 | 86 | — |
| Total\tamortization\texpenses | $1,242 | $1,165 | $923 |

Based	on	identified	intangible	assets	that	are	subject	to	amortization	as	of December	28,	2013,	we	expect	future	amortization	expense	for	each	period	to be	as	follows:

| (In	Millions) | 2014 | 2015 | 2016 | 2017 | 2018 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Acquisition-related\tdeveloped\ttechnology | $579 | $303 | $211 | $63 | $41 |
| Acquisition-related\tcustomer\trelationships | 268 | 251 | 233 | 142 | 29 |
| Acquisition-related\ttrade\tnames | 10 | 9 | 3 | — | — |
| Licensed\ttechnology\tand\tpatents | 270 | 252 | 238 | 199 | 158 |
| Total\tfuture\tamortization\texpenses | $1,127 | $815 | $685 | $404 | $228 |

# Note	12:	Other	Long-Term	Assets

Other	long-term	assets	at	the	end	of	each	period	were	as	follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 |
| :--- | :--- | :--- |
| Equity\tmethod\tinvestments | $1,038 | $992 |
| Non-marketable\tcost\tmethod\tinvestments | 1,270 | 1,202 |
| Non-current\tdeferred\ttax\tassets | 434 | 358 |
| Loans\treceivable | 952 | 644 |
| Other | 1,795 | 952 |
| Total\tother\tlong-term\tassets | $5,489 | $4,148 |

# Note	13:	Restructuring	and	Asset	Impairment	Charges

In	response	to	the	current	business	environment,	during	2013,	management	approved	several	restructuring	actions	including	targeted	workforce reductions	as	well	as	exit	of	certain	businesses	and	facilities.	These	actions	include	the	wind	down	of	our	200	millimeter	(mm)	wafer	fabrication	facility	in Massachusetts,	which	we	expect	to	cease	production	by	the	end	of	2014.	These	targeted	reductions	will	enable	the	company	to	better	align	our	resources in	areas	providing	the	greatest	benefit	in	the	changing	market.

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Employee\tseverance\tand\tbenefit\tarrangements | $201 | $— | $— |
| Asset\timpairments | 39 | — | — |
| Total\trestructuring\tand\tasset\timpairment\tcharges | $240 | $— | $— |

We	recorded	the	additional	accruals	and	adjustments	as	restructuring	and	asset	impairment	charges	in	the	consolidated	statements	of	income	within	the "all	other"	operating	segment.	The	charges	incurred	during	2013	included	$201	million	related	to	employee	severance	and	benefit	arrangements,	which impacted	approximately	3,900	employees.	The	accrued	restructuring	balance	as	of	December	28,	2013,	relates	to	employee	severance	and	benefits which	are	expected	to	be	paid	within	the	next	12	months	and	was	recorded	as	a	current	liability	within	accrued	compensation	and	benefits	in	the consolidated	balance	sheets.

# Note	14:	Deferred	Income

Deferred	income	at	the	end	of	each	period	was	as	follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 |
| :--- | :--- | :--- |
| Deferred\tincome\ton\tshipments\tof\tcomponents\tto\tdistributors | $852 | $694 |
| Deferred\tincome\tfrom\tsoftware\tand\tservices\toperating\tsegments | 1,244 | 1,238 |
| Current\tdeferred\tincome | $2,096 | $1,932 |
| Non-current\tdeferred\tincome\tfrom\tsoftware\tand\tservices\toperating\tsegments | 506 | 473 |
| Total\tdeferred\tincome | $2,602 | $2,405 |

We	classify	non-current	deferred	income	from	the	software	and	services	operating	segments	in	other	long-term	liabilities.

# Note	15:	Chipset	Design	Issue

In	January	2011,	as	part	of	our	ongoing	quality	assurance	procedures,	we	identified	a	design	issue	with	the	Intel ®	6	Series	Express	Chipset	family.	The issue	affected	chipsets	sold	in	the	fourth	quarter	of	2010	and	January	2011.	We	subsequently	implemented	a	silicon	fix	and	began	shipping	the	updated version	of	the	affected	chipset	in	February	2011.	The	total	cost	in	2011	to	repair	and	replace	affected	materials	and	systems,	located	with	customers	and in	the	market,	was	$422	million.	We	do	not	expect	to	have	any	significant	future	adjustments	related	to	this	issue.

# Note	16:	Borrowings

# Short-Term	Debt

As	of	December	28,	2013,	short-term	debt	consisted	of	drafts	payable	of	 $257	million	and	notes	payable	of	$24	million	(drafts	payable	of	$264	million	and notes	payable	of	$48	million	as	of	December	29,	2012).	We	have	an	ongoing	authorization	from	our	Board	of	Directors	to	borrow	up	to	 $3.0	billion, including	through	the	issuance	of	commercial	paper.	Maximum	borrowings	under	our	commercial	paper	program	during	2013	were	$300	million	($500 million	during	2012).	Our	commercial	paper	was	rated	A-1+	by	Standard	&	Poor's	and	 P-1	by	Moody's	as	of	December	28,	2013.

# Long-Term	Debt

Our	long-term	debt	at	the	end	of	each	period	was	as	follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 |
| :--- | :--- | :--- |
| 2012\tSenior\tnotes\tdue\t2017\tat\t1.35% | $2,997 | $2,997 |
| 2012\tSenior\tnotes\tdue\t2022\tat\t2.70% | 1,494 | 1,494 |
| 2012\tSenior\tnotes\tdue\t2032\tat\t4.00% | 744 | 743 |
| 2012\tSenior\tnotes\tdue\t2042\tat\t4.25% | 924 | 924 |
| 2011\tSenior\tnotes\tdue\t2016\tat\t1.95% | 1,499 | 1,498 |
| 2011\tSenior\tnotes\tdue\t2021\tat\t3.30% | 1,996 | 1,996 |
| 2011\tSenior\tnotes\tdue\t2041\tat\t4.80% | 1,490 | 1,489 |
| 2009\tJunior\tsubordinated\tconvertible\tdebentures\tdue\t2039\tat\t3.25% | 1,075 | 1,063 |
| 2005\tJunior\tsubordinated\tconvertible\tdebentures\tdue\t2035\tat\t2.95% | 946 | 932 |
| Total\tlong-term\tdebt | $13,165 | $13,136 |

# Senior	Notes

In	the	fourth	quarter	of	2012,	we	issued	 $6.2	billion	aggregate	principal	amount	of	senior	unsecured	notes	for	general	corporate	purposes	and	to repurchase	shares	of	our	common	stock	pursuant	to	our	authorized	common	stock	repurchase	program.	In	the	third	quarter	of	2011,	we	issued	$5.0	billion aggregate	principal	amount	of	senior	unsecured	notes,	primarily	to	repurchase	shares	of	our	common	stock	pursuant	to	our	authorized	common	stock repurchase	program,	and	for	general	corporate	purposes.

Our	senior	notes	pay	a	fixed	rate	of	interest	semiannually.	We	may	redeem	our	senior	notes,	in	whole	or	in	part,	at	any	time	at	our	option	at	specified redemption	prices.	The	senior	notes	rank	equally	in	right	of	payment	with	all	of	our	other	existing	and	future	senior	unsecured	indebtedness	and	will effectively	rank	junior	to	all	liabilities	of	our	subsidiaries.

# Convertible	Debentures

In	2009,	we	issued	$2.0	billion	of	junior	subordinated	convertible	debentures	(the	2009	debentures).	In	2005,	we	issued $1.6	billion	of	junior	subordinated convertible	debentures	(the	2005	debentures).	Both	the	2009	and	2005	debentures	pay	a	fixed	rate	of	interest	semiannually.

|  | 2009<br>Debentures | 2005<br>Debentures |
| :--- | :--- | :--- |
| Annual\tcoupon\tinterest\trate | 3.25% | 2.95% |
| Annual\teffective\tinterest\trate | 7.20% | 6.45% |
| Maximum\tamount\tof\tcontingent\tinterest\tthat\twill\taccrue\tper\tyear | 0.50% | 0.40% |

The	effective	interest	rate	is	based	on	the	rate	for	a	similar	instrument	that	does	not	have	a	conversion	feature.

Both	the	2009	and	2005	debentures	have	a	contingent	interest	component	that	requires	us	to	pay	interest	based	on	certain	thresholds	or	for	certain events,	commencing	on	August	1,	2019	for	the	2009	debentures.	As	of	December	28,	2013,	we	have	not	met	any	of	the	thresholds	or	events	related	to the	2005	debentures.	The	fair	values	of	the	related	embedded	derivatives	were	$10	million	and	$9	million	as	of	December	28,	2013,	for	the	2009	and	2005 debentures,	respectively	($6	million	and	zero	as	of	December	29,	2012	for	the	2009	and	2005	debentures,	respectively).

Both	the	2009	and	2005	debentures	are	convertible,	subject	to	certain	conditions,	into	shares	of	our	common	stock.	Holders	can	surrender	the	2009 debentures	for	conversion	if	the	closing	price	of	Intel	common	stock	has	been	at	least	130%	of	the	conversion	price	then	in	effect	for	at	least	 20	trading days	during	the	30	consecutive	trading-day	period	ending	on	the	last	trading	day	of	the	preceding	fiscal	quarter.	Holders	can	surrender	the	2005 debentures	for	conversion	at	any	time.	We	will	settle	any	conversion	or	repurchase	of	the	2009	debentures	in	cash	up	to	the	face	value,	and	any	amount in	excess	of	face	value	will	be	settled	in	cash	or	stock	at	our	option.	However,	we	can	settle	any	conversion	or	repurchase	of	the	2005	debentures	in	cash or	stock	at	our	option.	On	or	after	August	5,	2019,	we	can	redeem,	for	cash,	all	or	part	of	the	2009	debentures	for	the	principal	amount,	plus	any	accrued and	unpaid	interest,	if	the	closing	price	of	Intel	common	stock	has	been	at	least	150%	of	the	conversion	price	then	in	effect	for	at	least	 20	trading	days during	any	30	consecutive	trading-day	period	prior	to	the	date	on	which	we	provide	notice	of	redemption.	We	can	redeem,	for	cash,	all	or	part	of	the	2005 debentures	for	the	principal	amount,	plus	any	accrued	and	unpaid	interest,	if	the	closing	price	of	Intel	common	stock	has	been	at	least	130%	of	the conversion	price	then	in	effect	for	at	least	20	trading	days	during	any	30	consecutive	trading-day	period	prior	to	the	date	on	which	we	provide	notice	of redemption.	If	certain	events	occur	in	the	future,	the	indentures	governing	the	2009	and	2005	debentures	provide	that	each	holder	of	the	debentures	can, for	a	pre-defined	period	of	time,	require	us	to	repurchase	the	holder's	debentures	for	the	principal	amount	plus	any	accrued	and	unpaid	interest.	Both	the 2009	and	2005	debentures	are	subordinated	in	right	of	payment	to	any	existing	and	future	senior	debt	and	to	the	other	liabilities	of	our	subsidiaries.	We have	concluded	that	both	the	2009	and	2005	debentures	are	not	conventional	convertible	debt	instruments	and	that	the	embedded	stock	conversion options	qualify	as	derivatives.	In	addition,	we	have	concluded	that	the	embedded	conversion	options	would	be	classified	in	stockholders'	equity	if	they were	freestanding	derivative	instruments.	As	such,	the	embedded	conversion	options	are	not	accounted	for	separately	as	derivatives.

|  | 2009	Debentures | 2009	Debentures | 2005	Debentures | 2005	Debentures |
| :--- | :--- | :--- | :--- | :--- |
| (In\tMillions,\tExcept\tPer\tShare\tAmounts) | Dec\t28,\n2013 | Dec\t29,\n2012 | Dec\t28,\n2013 | Dec\t29,\n2012 |
| Outstanding\tprincipal | $2,000 | $2,000 | $1,600 | $1,600 |
| Equity\tcomponent\tcarrying\tamount | $613 | $613 | $466 | $466 |
| Unamortized\tdiscount | $910 | $922 | $643 | $656 |
| Net\tdebt\tcarrying\tamount | $1,075 | $1,063 | $946 | $932 |
| Conversion\trate\t(shares\tof\tcommon\tstock\tper\t$1,000\tprincipal\tamount\tof\ndebentures) | 45.57 | 45.05 | 34.60 | 33.86 |
| Effective\tconversion\tprice\t(per\tshare\tof\tcommon\tstock) | $21.94 | $22.20 | $28.90 | $29.53 |

The	conversion	rate	adjusts	for	certain	events	outlined	in	the	indentures	governing	the	2009	and	2005	debentures,	such	as	quarterly	dividend	distributions in	excess	of	$0.14	and	$0.10	per	share	for	the	2009	and	2005	debentures,	respectively,	but	it	does	not	adjust	for	accrued	interest.	In	addition,	the conversion	rate	will	increase	for	a	holder	of	either	the	2009	or	2005	debentures	who	elects	to	convert	the	debentures	in	connection	with	certain	share exchanges,	mergers,	or	consolidations	involving	Intel.

# Arizona	Bonds

In	2007,	we	guaranteed	repayment	of	principal	and	interest	on	bonds	issued	by	the	Industrial	Development	Authority	of	the	City	of	Chandler,	Arizona, which	constituted	an	unsecured	general	obligation	for	Intel.	The	aggregate	principal	amount	of	the	bonds	issued	in	December	2007	was	$125	million.	The 2007	Arizona	bonds	were	tendered	and	repaid	in	December	2012.	These	bonds	bore	interest	at	a	fixed	rate	of	5.3%.	In	the	future,	we	may	re-market	the bonds	as	either	fixed-rate	bonds	for	a	specified	period	or	as	variable-rate	bonds	until	their	final	maturity	on	December	1,	2037.

# Debt	Maturities

Our	aggregate	debt	maturities	based	on	outstanding	principal	as	of	December	28,	2013,	by	year	payable,	were	as	follows:

| (In	Millions) |  |
| :--- | :--- |
| 2014 | $— |
| 2015 | — |
| 2016 | 1,500 |
| 2017 | 3,000 |
| 2018 | — |
| 2019\tand\tthereafter | 10,275 |
| Total | $14,775 |

Substantially	all	of	the	difference	between	the	total	aggregate	debt	maturities	in	the	preceding	table	and	the	total	carrying	amount	of	our	debt	is	due	to	the unamortized	discount	of	our	convertible	debentures.

# Note	17:	Retirement	Benefit	Plans

# Retirement	Contribution	Plans

We	provide	tax-qualified	retirement	contribution	plans	for	the	benefit	of	eligible	employees,	former	employees,	and	retirees	in	the	U.S.	and	certain	other countries.	The	plans	are	designed	to	provide	employees	with	an	accumulation	of	funds	for	retirement	on	a	tax-deferred	basis.	Employees	hired	prior	to January	1,	2011	are	eligible	for	and	receive	discretionary	employer	contributions	in	the	U.S.	Intel	Retirement	Contribution	Plan,	while	employees	hired	on or	after	January	1,	2011	receive	discretionary	employer	contributions	in	the	Intel	401(k)	Savings	Plan.	Our	Chief	Executive	Officer	(CEO)	determines	the annual	discretionary	employer	contribution	amounts	for	the	U.S.	Intel	Retirement	Contribution	Plan	and	the	Intel	401(k)	Savings	Plan	under	delegation	of authority	from	our	Board	of	Directors,	pursuant	to	the	terms	of	the	plans.	As	of	December	28,	2013,	83%	of	our	U.S.	Intel	Retirement	Contribution	Plan assets	were	invested	in	equities,	and	17%	were	invested	in	fixed-income	instruments.	These	assets	are	managed	by	external	investment	managers.	The discretionary	employer	contributions	made	to	the	Intel	401(k)	Savings	Plan	are	participant-directed.

For	the	benefit	of	eligible	U.S.	employees,	we	also	provide	a	non-tax-qualified	supplemental	deferred	compensation	plan	for	certain	highly	compensated employees.	This	plan	is	designed	to	permit	certain	discretionary	employer	contributions	and	to	permit	employee	deferral	of	a	portion	of	compensation	in addition	to	their	Intel	401(k)	Savings	Plan	deferrals.	This	plan	is	unfunded.

We	expensed	$298	million	for	the	qualified	and	non-qualified	U.S.	retirement	contribution	plans	in	 2013	($357	million	in	2012	and	$340	million	in	2011).	In the	first	quarter	of	2014,	we	funded	$288	million	for	the	2013	contributions	to	the	qualified	U.S.	retirement	contribution	plans.

# Pension	and	Postretirement	Benefit	Plans

U.S.	Pension	Benefits.	For	employees	hired	prior	to	January	1,	2011,	we	provide	a	tax-qualified	defined-benefit	pension	plan,	the	U.S.	Intel	Minimum Pension	Plan,	for	eligible	employees,	former	employees,	and	retirees	in	the	U.S.	The	U.S.	Intel	Minimum	Pension	Plan	benefit	is	determined	by	a participant's	years	of	service	and	final	average	compensation	as	defined	by	the	plan	document.	The	plan	generates	a	minimum	pension	benefit	if	the participants'	U.S.	Intel	Minimum	Pension	Plan	benefit	exceeds	the	annuitized	value	of	their	U.S.	Intel	Retirement	Contribution	Plan	benefit.	If	participant balances	in	the	U.S.	Intel	Retirement	Contribution	Plan	do	not	grow	sufficiently,	the	projected	benefit	obligation	of	the	U.S.	Intel	Minimum	Pension	Plan could	increase	significantly.	Consistent	with	applicable	law,	assets	of	the	U.S.	Intel	Minimum	Pension	Plan	are	held	in	trust,	solely	for	the	benefit	of	plan participants,	and	are	not	available	for	general	corporate	purposes.

Non-U.S.	Pension	Benefits.	We	also	provide	defined-benefit	pension	plans	in	certain	other	countries,	most	significantly	Ireland,	Israel,	Germany	and Japan.	Consistent	with	the	requirements	of	local	law,	we	deposit	funds	for	certain	plans	with	insurance	companies,	with	third-party	trustees,	or	into government-managed	accounts,	and/or	accrue	for	the	unfunded	portion	of	the	obligation.	Effective	June	20,	2012,	Ireland	closed	its	pension	plan	to employees	hired	on	or	after	this	date.

U.S.	Postretirement	Medical	Benefits.	Upon	retirement,	eligible	U.S.	employees	who	were	hired	prior	to	January	1,	2014,	are	credited	with	a	defined	dollar amount,	based	on	years	of	service,	into	a	U.S.	Sheltered	Employee	Retirement	Medical	Account	(SERMA).	These	credits	can	be	used	to	pay	all	or	a portion	of	the	cost	to	purchase	coverage	in	the	retiree's	choice	of	medical	plan.	If	the	available	credits	are	not	sufficient	to	pay	the	entire	cost	of	the coverage,	the	remaining	cost	is	the	retiree's	responsibility.	Effective	January	1,	2014,	employees	hired	on	or	after	January	1,	2014,	are	not	eligible	to	earn a	SERMA	benefit.

Funding	Policy.	Our	practice	is	to	fund	the	various	pension	plans	and	the	U.S.	postretirement	medical	benefits	plan	in	amounts	sufficient	to	meet	the minimum	requirements	of	applicable	local	laws	and	regulations.	Additional	funding	may	be	provided	as	deemed	appropriate.	Depending	on	the	design	of the	plan,	local	customs,	and	market	circumstances,	the	liabilities	of	a	plan	may	exceed	qualified	plan	assets.

# Benefit	Obligation	and	Plan	Assets

The	changes	in	the	projected	benefit	obligations	and	plan	assets	for	the	plans	described	above	were	as	follows:

|  | U.S.	Pension	Benefits | U.S.	Pension	Benefits | Non-U.S.	Pension<br>Benefits | Non-U.S.	Pension<br>Benefits | U.S.	Postretirement<br>Medical	Benefits |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Beginning\tprojected\tbenefit\tobligation | $1,742 | $1,480 | $1,412 | $1,121 | $484 | $369 |
| Service\tcost | 119 | 98 | 78 | 64 | 27 | 30 |
| Interest\tcost | 67 | 69 | 60 | 52 | 20 | 17 |
| Actuarial\t(gain)\tloss | (746) | 108 | 121 | 172 | (56) | 75 |
| Other | (45) | (13) | 24 | 3 | 34 | (7) |
| Ending\tprojected\tbenefit\tobligation | $1,137 | $1,742 | $1,695 | $1,412 | $509 | $484 |

|  | U.S.	Pension	Benefits | U.S.	Pension	Benefits | Non-U.S.	Pension<br>Benefits |  | U.S.	Postretirement<br>Medical	Benefits |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Beginning\tfair\tvalue\tof\tplan\tassets | $684 | $648 | $838 | $722 | $191 | $116 |
| Actual\treturn\ton\tplan\tassets | 10 | 49 | 81 | 70 | 49 | — |
| Employer\tcontributions | — | — | 65 | 52 | 162 | 82 |
| Other | (45) | (13) | 21 | (6) | (7) | (7) |
| Ending\tfair\tvalue\tof\tplan\tassets | $649 | $684 | $1,005 | $838 | $395 | $191 |

The	amounts	recognized	on	the	consolidated	balance	sheets	at	the	end	of	each	period	were	as	follows:

|  | U.S.	Pension	Benefits | U.S.	Pension	Benefits | Non-U.S.	Pension<br>Benefits | Non-U.S.	Pension<br>Benefits | U.S.	Postretirement<br>Medical	Benefits | U.S.	Postretirement<br>Medical	Benefits |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Dec\t28,\n2013 | Dec\t29,\n2012 | Dec\t28,\n2013 | Dec\t29,\n2012 | Dec\t28,\n2013 | Dec\t29,\n2012 |
| Other\tlong-term\tassets | $— | $— | $16 | $1 | $— | $— |
| Other\tlong-term\tliabilities | (488) | (1,058) | (706) | (575) | (114) | (293) |
| Accumulated\tother\tcomprehensive\tloss\t(income),\tbefore\ttax | 255 | 1,050 | 520 | 477 | 43 | 138 |
| Net\tamount\trecognized | $(233) | $(8) | $(170) | $(97) | $(71) | $(155) |

The	amounts	recorded	in	accumulated	other	comprehensive	income	(loss)	before	taxes	at	the	end	of	each	period	were	as	follows:

|  | U.S.	Pension	Benefits | U.S.	Pension	Benefits | Non-U.S.	Pension<br>Benefits | Non-U.S.	Pension<br>Benefits | U.S.	Postretirement<br>Medical	Benefits | U.S.	Postretirement<br>Medical	Benefits |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Dec\t28,\n2013 | Dec\t29,\n2012 | Dec\t28,\n2013 | Dec\t29,\n2012 | Dec\t28,\n2013 | Dec\t29,\n2012 |
| Net\tprior\tservice\tcredit\t(cost) | $— | $— | $25 | $12 | $(54) | $(60) |
| Net\tactuarial\tgain\t(loss) | (255) | (1,050) | (545) | (489) | 11 | (78) |
| Accumulated\tother\tcomprehensive\tincome\t(loss),\tbefore\ntax | $(255) | $(1,050) | $(520) | $(477) | $(43) | $(138) |

As	of	December	28,	2013,	the	accumulated	benefit	obligation	was	 $497	million	for	the	U.S.	Intel	Minimum	Pension	Plan	( $562	million	as	of	December	29, 2012)	and	$1.3	billion	for	the	non-U.S.	defined-benefit	pension	plans	($1.1	billion	as	of	December	29,	2012).	Included	in	the	aggregate	data	in	the following	tables	are	the	amounts	applicable	to	our	pension	plans,	with	accumulated	benefit	obligations	in	excess	of	plan	assets,	as	well	as	plans	with projected	benefit	obligations	in	excess	of	plan	assets.	Amounts	related	to	such	plans	at	the	end	of	each	period	were	as	follows:

|  | U.S.	Pension	Benefits | U.S.	Pension	Benefits | Non-U.S.	Pension<br>Benefits | Non-U.S.	Pension<br>Benefits |
| :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Dec\t28,\n2013 | Dec\t29,\n2012 | Dec\t28,\n2013 | Dec\t29,\n2012 |
| Plans\twith\taccumulated\tbenefit\tobligations\tin\texcess\tof\tplan\tassets: |  |  |  |  |
| Accumulated\tbenefit\tobligations | $— | $— | $900 | $813 |
| Plan\tassets | $— | $— | $563 | $508 |
| Plans\twith\tprojected\tbenefit\tobligations\tin\texcess\tof\tplan\tassets: |  |  |  |  |
| Projected\tbenefit\tobligations | $1,137 | $1,742 | $1,295 | $1,400 |
| Plan\tassets | $649 | $684 | $588 | $825 |

On	a	worldwide	basis,	our	pension	and	postretirement	benefit	plans	were	 61%	funded	as	of	December	28,	2013.	The	U.S.	Intel	Minimum	Pension	Plan, which	accounts	for	approximately	34%	of	the	worldwide	pension	and	postretirement	benefit	obligations,	was	 57%	funded.	Funded	status	is	not	indicative of	our	ability	to	pay	ongoing	pension	benefits	or	of	our	obligation	to	fund	retirement	trusts.	Required	pension	funding	for	U.S.	retirement	plans	is determined	in	accordance	with	the	Employee	Retirement	Income	Security	Act	(ERISA)	which	sets	required	minimum	contributions.	Cumulative	company funding	to	the	U.S.	Intel	Minimum	Pension	Plan	currently	exceeds	the	minimum	ERISA	funding	requirements.

# Assumptions

Weighted	average	actuarial	assumptions	used	to	determine	benefit	obligations	for	the	plans	at	the	end	of	each	period	were	as	follows:

For	the	U.S.	plans,	we	developed	the	discount	rate	by	calculating	the	benefit	payment	streams	by	year	to	determine	when	benefit	payments	will	be	due. We	then	matched	the	benefit	payment	streams	by	year	to	the	AA	corporate	bond	rates	to	match	the	timing	and	amount	of	the	expected	benefit	payments and	discounted	back	to	the	measurement	date	to	determine	the	appropriate	discount	rate.	For	the	non-U.S.	plans,	we	used	two	approaches	to	develop	the discount	rate.	In	certain	countries,	we	used	a	model	consisting	of	a	theoretical	bond	portfolio	for	which	the	timing	and	amount	of	cash	flows	approximated the	estimated	benefit	payments	of	our	pension	plans.	In	other	countries,	we	analyzed	current	market	long-term	bond	rates	and	matched	the	bond	maturity with	the	average	duration	of	the	pension	liabilities.

The	expected	long-term	rate	of	return	on	plan	assets	assumptions	takes	into	consideration	both	duration	and	risk	of	the	investment	portfolios,	and	is developed	through	consensus	and	building-block	methodologies.	The	consensus	methodology	includes	unadjusted	estimates	by	the	fund	manager	on future	market	expectations	by	broad	asset	classes	and	geography.	The	building-block	approach	determines	the	rates	of	return	implied	by	historical	risk premiums	across	asset	classes.	In	addition,	we	analyze	rates	of	return	relevant	to	the	country	where	each	plan	is	in	effect	and	the	investments	applicable to	the	plan,	expectations	of	future	returns,	local	actuarial	projections,	and	the	projected	long-term	rates	of	return	from	external	investment	managers.	The expected	long-term	rate	of	return	on	plan	assets	shown	for	the	non-U.S.	plan	assets	is	weighted	to	reflect	each	country's	relative	portion	of	the	non- U.S.	plan	assets.

# Net	Periodic	Benefit	Cost

The	increase	in	the	U.S.	and	non-U.S.	pension	benefit	costs	is	primarily	attributed	to	an	increase	in	service	costs	compared	to	2012.	The	increase	in	the U.S.	postretirement	medical	benefits	compared	to	2012	is	primarily	attributed	to	special	one-time	termination	benefit	costs	incurred	in	2013.

# U.S.	Pension	Plan	Assets

In	general,	the	investment	strategy	for	U.S.	Intel	Minimum	Pension	Plan	assets	is	to	maximize	risk-adjusted	returns,	taking	into	consideration	the investment	horizon	and	expected	volatility,	to	ensure	that	there	are	sufficient	assets	available	to	pay	pension	benefits	as	they	come	due.	The	allocation	to each	asset	class	will	fluctuate	with	market	conditions,	such	as	volatility	and	liquidity	concerns,	and	will	typically	be	rebalanced	when	outside	the	target ranges,	which	are	60%	for	fixed-income	debt	instrument	investments	and	 40%	for	equity	investments	in	2013.	The	expected	long-term	rate	of	return	for the	U.S.	Intel	Minimum	Pension	Plan	assets	is	5.2%.

U.S.	Intel	Minimum	Pension	Plan	assets	measured	at	fair	value	on	a	recurring	basis	consisted	of	the	following	investment	categories	at	the	end	of	each period	were	as	follows:

| (In	Millions) | Level	1 | Level	2 | Level	3 | Total | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Equity\tsecurities | $15 | $205 | $— | $220 | $92 |
| Fixed\tincome | 88 | 255 | 72 | 415 | 582 |
| Other\tinvestments | 11 | — | — | 11 | — |
| Total\tassets\tmeasured\tat\tfair\tvalue | $114 | $460 | $72 | $646 | $674 |
| Cash |  |  |  | 3 | 10 |
| Total\tU.S.\tpension\tplan\tassets\tat\tfair\tvalue |  |  |  | $649 | $684 |

A	substantial	majority	of	the	fixed	income	investments	in	the	preceding	table	are	corporate	bonds,	government	bonds,	and	asset-backed	securities. Corporate	bonds	include	both	U.S.	and	non-U.S.	bonds	with	the	majority	held	in	high-quality	bonds.	Government	bonds	include	bonds	issued	or	deemed to	be	guaranteed	by	government	entities	and	include	instruments	such	as	non-U.S.	government	bonds,	U.S.	Treasury	securities,	and	U.S.	agency securities.	The	Level	3	investments	relate	to	our	asset-backed	securities,	as	we	used	unobservable	inputs	to	the	valuations	that	were	significant	to	the	fair value	measurements.

# Non-U.S.	Plan	Assets

The	investments	of	the	non-U.S.	plans	are	managed	by	insurance	companies,	third-party	trustees,	or	pension	funds,	consistent	with	regulations	or	market practice	of	the	country	where	the	assets	are	invested.	The	investment	manager	makes	investment	decisions	within	the	guidelines	set	by	Intel	or	local regulations.	The	investment	manager	evaluates	performance	by	comparing	the	actual	rate	of	return	to	the	return	on	similar	assets.	Investments	managed by	qualified	insurance	companies	or	pension	funds	under	standard	contracts	follow	local	regulations,	and	we	are	not	actively	involved	in	their	investment strategies.	For	the	assets	that	we	have	discretion	to	set	investment	guidelines,	the	assets	are	invested	in	developed	country	equities	and	fixed-income debt	instruments,	either	through	index	funds	or	direct	investment.	In	general,	the	investment	strategy	is	designed	to	accumulate	a	diversified	portfolio among	markets,	asset	classes,	or	individual	securities	to	reduce	market	risk	and	to	assure	that	the	pension	assets	are	available	to	pay	benefits	as	they come	due.	The	target	allocation	of	the	non-U.S.	plan	assets	that	we	have	control	over	is	80%	equity	securities	and	20%	fixed-income	instruments.	The average	expected	long-term	rate	of	return	for	the	non-U.S.	plan	assets	is	5.7%.

Non-U.S.	plan	assets	measured	at	fair	value	on	a	recurring	basis	consisted	of	the	following	investment	categories	at	the	end	of	each	period	were	as follows:

| (In	Millions) | Level	1 | Level	2 | Level	3 | Total | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Equity\tsecurities | $287 | $63 | $11 | $361 | $248 |
| Fixed\tincome | — | 521 | 33 | 554 | 574 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $287 | $584 | $44 | $915 | $822 |
| Cash |  |  |  | 90 | 16 |
| Total\tnon-U.S.\tplan\tassets\tat\tfair\tvalue |  |  |  | $1,005 | $838 |

Substantially	all	of	the	equity	securities	in	the	preceding	table	are	invested	in	a	diversified	mix	of	equities	of	developed	countries,	including	the	U.S.,	and emerging	markets	throughout	the	world.

The	majority	of	the	fixed	income	securities	in	the	preceding	table	are	investments	held	by	insurance	companies	and	insurance	contracts	that	are	managed by	qualified	insurance	companies.	We	do	not	have	control	over	the	target	allocation	or	visibility	of	the	investment	strategies	of	those	investments. Insurance	contracts	and	investments	held	by	insurance	companies	made	up	38%	of	total	non-U.S.	plan	assets	as	of	 December	28,	2013	(40%	as	of December	29,	2012).

# U.S.	Postretirement	Medical	Plan	Assets

In	general,	the	investment	strategy	for	U.S.	postretirement	medical	benefits	plan	assets	is	to	invest	primarily	in	liquid	assets	due	to	the	level	of	expected future	benefit	payments.	In	2012,	we	modified	the	investment	strategy	for	plan	assets	from	investing	solely	in	a	money	market	account	to	investing	in	a tax-aware	global	equity	portfolio,	which	is	actively	managed	by	an	external	investment	manager.	The	tax-aware	global	equity	portfolio	is	comprised	of	a diversified	mix	of	equities	in	developed	countries,	including	the	U.S.,	and	emerging	markets	throughout	the	world.	The	expected	long-term	rate	of	return for	the	U.S.	postretirement	medical	benefits	plan	assets	is	7.4%.	As	of	December	28,	2013,	substantially	all	of	the	U.S.	postretirement	medical	benefits plan	assets	were	invested	in	exchange-traded	equity	securities	and	were	measured	at	fair	value	using	Level	1	inputs.

# Concentrations	of	Risk

We	manage	a	variety	of	risks,	including	market,	credit,	and	liquidity	risks,	across	our	plan	assets	through	our	investment	managers.	We	define	a concentration	of	risk	as	an	undiversified	exposure	to	one	of	the	aforementioned	risks	that	unnecessarily	increases	the	exposure	to	a	loss	of	plan	assets. We	monitor	exposure	to	such	risks	in	both	the	U.S.	and	non-U.S.	plans	by	monitoring	the	magnitude	of	the	risk	in	each	plan	and	diversifying	our	exposure to	such	risks	across	a	variety	of	instruments,	markets,	and	counterparties.	As	of	December	28,	2013,	we	did	not	have	concentrations	of	risk	in	any	single entity,	manager,	counterparty,	sector,	industry,	or	country.

# Funding	Expectations

Under	applicable	law	for	the	U.S.	Intel	Minimum	Pension	Plan	and	the	U.S.	postretirement	medical	benefits	plan,	we	are	not	required	to	make	any contributions	during	2014.	Our	expected	required	funding	for	the	non-U.S.	plans	during	 2014	is	approximately	$62	million.

# Estimated	Future	Benefit	Payments

Estimated	benefit	payments	over	the	next	10	fiscal	years	are	as	follows:

| (In	Millions) | U.S.	Pension<br>Benefits | Non-U.S.<br>Pension<br>Benefits | Postretirement<br>Medical<br>Benefits |
| :--- | :--- | :--- | :--- |
| 2014 | $42 | $33 | $23 |
| 2015 | $51 | $32 | $22 |
| 2016 | $63 | $32 | $24 |
| 2017 | $71 | $36 | $22 |
| 2018 | $88 | $38 | $21 |
| 2019-2023 | $691 | $219 | $99 |

# Note	18:	Commitments

A	portion	of	our	capital	equipment	and	certain	facilities	are	under	operating	leases	that	expire	at	various	dates	through	 2028.	Additionally,	portions	of	our real	property	are	under	leases	that	expire	at	various	dates	through	2062.	Rental	expense	was	$270	million	in	2013	($214	million	in	2012	and	$178	million in	2011).

| (In	Millions) |  |
| :--- | :--- |
| 2014 | $208 |
| 2015 | 172 |
| 2016 | 126 |
| 2017 | 97 |
| 2018 | 69 |
| 2019\tand\tthereafter | 198 |
| Total | $870 |

Commitments	for	construction	or	purchase	of	property,	plant	and	equipment	totaled	 $5.5	billion	as	of	December	28,	2013	($4.6	billion	as	of	December	29, 2012),	substantially	all	of	which	will	be	due	within	the	next	year.	Other	purchase	obligations	and	commitments	totaled	approximately	 $1.9	billion	as	of December	28,	2013	(approximately	$2.0	billion	as	of	December	29,	2012).	Other	purchase	obligations	and	commitments	include	payments	due	under various	types	of	licenses	and	agreements	to	purchase	goods	or	services,	as	well	as	payments	due	under	non-contingent	funding	obligations.	Funding obligations	include	agreements	to	fund	various	projects	with	other	companies.	In	addition,	we	have	various	contractual	commitments	with	Micron	and IMFT.	For	further	information	on	these	contractual	commitments,	see	"Note	5:	Cash	and	Investments."

During	2012,	we	entered	into	a	series	of	agreements	with	ASML	intended	to	accelerate	the	development	of	450mm	wafer	technology	and	 extreme ultraviolet	lithography	(EUV).	Intel	agreed	to	provide	R&D	funding	totaling	 €829	million	over	five	years	and	committed	to	advance	purchase	orders	for	a specified	number	of	tools	from	ASML.	Our	remaining	obligation,	contingent	upon	ASML	achieving	certain	milestones,	is	approximately	 €738	million,	or $1.0	billion,	as	of	December	28,	2013.	As	our	obligation	is	contingent	upon	ASML	achieving	certain	milestones,	we	have	not	included	this	obligation	in	the preceding	other	purchase	obligations	and	commitments	total.

# Note	19:	Employee	Equity	Incentive	Plans

Our	equity	incentive	plans	are	broad-based,	long-term	programs	intended	to	attract	and	retain	talented	employees	and	align	stockholder	and	employee interests.

In	May	2013,	stockholders	approved	an	extension	of	the	2006	Equity	Incentive	Plan	(the	2006	Plan).	Stockholders	approved	 123	million	additional	shares for	issuance,	increasing	the	total	shares	of	common	stock	authorized	for	issuance	as	equity	awards	to	employees	and	non-employee	directors	to	719 million	shares.	The	approval	also	extended	the	expiration	date	of	the	2006	Plan	to	June	2016.	A	maximum	of	 517	million	of	these	shares	can	be	awarded as	non-vested	shares	(restricted	stock)	or	non-vested	share	units	(restricted	stock	units).	As	of	December	28,	2013,	304	million	shares	remained	available for	future	grant	under	the	2006	Plan.

Going	forward,	we	may	assume	the	equity	incentive	plans	and	the	outstanding	equity	awards	of	certain	acquired	companies.	Once	they	are	assumed,	we do	not	grant	additional	shares	under	those	plans.	In	connection	with	our	completed	acquisition	of	McAfee	in	2011,	we	assumed	McAfee's	equity	incentive plan	and	issued	replacement	awards.	The	stock	options	and	restricted	stock	units	issued	generally	retain	similar	terms	and	conditions	of	the	respective plan	under	which	they	were	originally	granted.

We	issue	restricted	stock	units	with	both	a	market	condition	and	a	service	condition	(market-based	restricted	stock	units),	referred	to	in	our	 2013	Proxy Statement	as	outperformance	stock	units,	to	a	small	group	of	senior	officers	and	non-employee	directors.	For	market-based	restricted	stock	units	issued	in 2013,	the	number	of	shares	of	Intel	common	stock	to	be	received	at	vesting	will	range	from	 50%	to	200%	of	the	target	amount,	based	on	total	stockholder return	(TSR)	on	Intel	common	stock	measured	against	the	benchmark	TSR	of	a	peer	group	over	a	three-year	period.	TSR	is	a	measure	of	stock	price appreciation	plus	any	dividends	paid	in	this	performance	period.	As	of	December	28,	2013,	3	million	market-based	restricted	stock	units	were	outstanding. These	market-based	restricted	stock	units	accrue	dividend	equivalents	and	generally	vest	three	years	and	one	month	from	the	grant	date.

Equity	awards	granted	to	employees	in	 2013	under	our	equity	incentive	plans	generally	vest	over	four	years	from	the	date	of	grant,	and	options	expire seven	years	from	the	date	of	grant,	with	the	exception	of	market-based	restricted	stock	units,	a	small	number	of	restricted	stock	units	granted	to executive-level	employees,	and	replacement	awards	related	to	acquisitions.

The	2006	Stock	Purchase	Plan	allows	eligible	employees	to	purchase	shares	of	our	common	stock	at	 85%	of	the	value	of	our	common	stock	on	specific dates.	In	May	2011,	stockholders	approved	an	extension	of	the	2006	Stock	Purchase	Plan.	Stockholders	approved	133	million	additional	shares	for issuance,	increasing	the	total	shares	of	common	stock	available	for	issuance	to	373	million	shares.	The	approval	also	extended	the	expiration	date	of	the 2006	Stock	Purchase	Plan	to	August	2016.	As	of	December	28,	2013,	216	million	shares	were	available	for	issuance	under	the	2006	Stock	Purchase Plan.

On	a	quarterly	basis,	we	assess	changes	to	our	estimate	of	expected	equity	award	forfeitures	based	on	our	review	of	recent	forfeiture	activity	and expected	future	employee	turnover.	We	recognize	the	effect	of	adjustments	made	to	the	forfeiture	rates,	if	any,	in	the	period	that	we	change	the	forfeiture estimate.	The	effect	of	forfeiture	adjustments	in	2013,	2012,	and	2011	was	not	significant.

The	total	share-based	compensation	cost	capitalized	as	part	of	inventory	as	of	 December	28,	2013,	was	$38	million	($41	million	as	of	December	29,	2012 and	$38	million	as	of	December	31,	2011).	During	2013,	the	tax	benefit	that	we	realized	for	the	tax	deduction	from	share-based	awards	totaled $385 million	($510	million	in	2012	and	$327	million	in	2011).

We	estimate	the	fair	value	of	restricted	stock	unit	awards	with	time-based	vesting	using	the	value	of	our	common	stock	on	the	date	of	grant,	reduced	by the	present	value	of	dividends	expected	to	be	paid	on	our	common	stock	prior	to	vesting.	We	estimate	the	fair	value	of	market-based	restricted	stock	units using	a	Monte	Carlo	simulation	model	on	the	date	of	grant.	We	based	the	weighted	average	estimated	value	of	restricted	stock	unit	grants,	as	well	as	the weighted	average	assumptions	that	we	used	in	calculating	the	fair	value,	on	estimates	at	the	date	of	grant,	for	each	period	as	follows:

|  | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Estimated\tvalues | $21.45 | $25.32 | $19.86 |
| Risk-free\tinterest\trate | 0.2% | 0.3% | 0.7% |
| Dividend\tyield | 3.8% | 3.3% | 3.4% |
| Volatility | 25% | 26% | 27% |

We	use	the	Black-Scholes	option	pricing	model	to	estimate	the	fair	value	of	options	granted	under	our	equity	incentive	plans	and	rights	to	acquire	stock granted	under	our	stock	purchase	plan.	We	based	the	weighted	average	estimated	value	of	employee	stock	option	grants	and	rights	granted	under	the stock	purchase	plan,	as	well	as	the	weighted	average	assumptions	used	in	calculating	the	fair	value,	on	estimates	at	the	date	of	grant,	for	each	period	as follows:

|  |  | Stock	Options |  |  | Stock	Purchase	Plan |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 |
| Estimated\tvalues | $3.11 | $4.22 | $3.91 | $4.52 | $5.47 | $4.69 |
| Expected\tlife\t(in\tyears) | 5.2 | 5.3 | 5.4 | 0.5 | 0.5 | 0.5 |
| Risk-free\tinterest\trate | 0.8% | 1.0% | 2.2% | 0.1% | 0.1% | 0.2% |
| Dividend\tyield | 3.9% | 3.3% | 3.4% | 4.0% | 3.3% | 3.6% |
| Volatility | 25% | 25% | 27% | 22% | 24% | 26% |

We	base	the	expected	volatility	on	implied	volatility	because	we	have	determined	that	implied	volatility	is	more	reflective	of	market	conditions	and	a	better indicator	of	expected	volatility	than	historical	volatility.	Prior	to	2011,	we	used	the	simplified	method	of	calculating	expected	life	due	to	significant differences	in	the	vesting	terms	and	contractual	life	of	current	option	grants	compared	to	our	historical	grants.	In	2011,	we	began	using	historical	option exercise	data	as	the	basis	for	determining	expected	life,	as	we	believe	that	we	have	sufficient	historical	data	to	provide	a	reasonable	basis	upon	which	to estimate	the	expected	life	input	for	valuing	options	using	the	Black-Scholes	model.

# Restricted	Stock	Unit	Awards

Information	with	respect	to	outstanding	RSU	activity	for	each	period	was	as	follows:

|  | Number	of<br>RSUs<br>(In	Millions) | Average<br>Grant-Date<br>Fair	Value |
| :--- | :--- | :--- |
| December\t25,\t2010 | 99.8 | $18.56 |
| Granted | 43.3 | $19.86 |
| Assumed\tin\tacquisition | 5.8 | $20.80 |
| Vested | (37.5) | $18.60 |
| Forfeited | (4.4) | $19.07 |
| December\t31,\t2011 | 107.0 | $19.18 |
| Granted | 49.9 | $25.32 |
| Vested | (43.2) | $18.88 |
| Forfeited | (4.4) | $20.93 |
| December\t29,\t2012 | 109.3 | $22.03 |
| Granted | 53.4 | $21.45 |
| Vested | (44.5) | $20.21 |
| Forfeited | (4.9) | $22.06 |
| December\t28,\t2013 | 113.3 | $22.47 |
| Expected\tto\tvest\tas\tof\tDecember\t28,\t2013 | 107.3 | $22.49 |

The	aggregate	fair	value	of	awards	that	vested	in	 2013	was	$1.0	billion	($1.2	billion	in	2012	and	$753	million	in	2011),	which	represents	the	market	value of	Intel	common	stock	on	the	date	that	the	restricted	stock	units	vested.	The	grant-date	fair	value	of	awards	that	vested	in	2013	was	$899	million	($816 million	in	2012	and	$697	million	in	2011).	The	number	of	restricted	stock	units	vested	includes	shares	that	we	withheld	on	behalf	of	employees	to	satisfy the	minimum	statutory	tax	withholding	requirements.	Restricted	stock	units	that	are	expected	to	vest	are	net	of	estimated	future	forfeitures.

As	of	December	28,	2013,	there	was	$1.6	billion	in	unrecognized	compensation	costs	related	to	restricted	stock	units	granted	under	our	equity	incentive plans.	We	expect	to	recognize	those	costs	over	a	weighted	average	period	of	1.2	years.

# Stock	Option	Awards

As	of	December	28,	2013,	options	outstanding	that	have	vested	and	are	expected	to	vest	were	as	follows:

|  | Number	of<br>Options<br>(In	Millions) | Weighted<br>Average<br>Exercise<br>Price | Weighted<br>Average<br>Remaining<br>Contractual<br>Term<br>(In	Years) |  | Aggregate<br>Intrinsic<br>Value<br>(In	Millions) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Vested | 111.5 | $20.25 |  | 2.6 | $617 |
| Expected\tto\tvest | 39.6 | $23.40 |  | 5.4 | $101 |
| Total | 151.1 | $21.08 |  | 3.3 | $718 |

Aggregate	intrinsic	value	represents	the	difference	between	the	exercise	price	and	 $25.60,	the	closing	price	of	Intel	common	stock	on	December	27, 2013,	as	reported	on	The	NASDAQ	Global	Select	Market*,	for	all	in-the-money	options	outstanding.	Options	outstanding	that	are	expected	to	vest	are	net of	estimated	future	option	forfeitures.

Options	with	a	fair	value	of	$186	million	completed	vesting	during	2013	($205	million	during	2012	and	$226	million	during	2011).	As	of	December	28, 2013,	there	was	$75	million	in	unrecognized	compensation	costs	related	to	stock	options	granted	under	our	equity	incentive	plans.	We	expect	to	recognize those	costs	over	a	weighted	average	period	of	1.1	years.

Additional	information	with	respect	to	stock	option	activity	for	each	period	was	as	follows:

|  | Number	of<br>Options<br>(In	Millions) | Average<br>Exercise<br>Price |
| :--- | :--- | :--- |
| December\t25,\t2010 | 386.4 | $20.45 |
| Grants | 14.7 | $21.49 |
| Assumed\tin\tacquisition | 12.0 | $15.80 |
| Exercises | (86.3) | $20.06 |
| Cancellations\tand\tforfeitures | (8.6) | $20.47 |
| Expirations | (19.9) | $24.85 |
| December\t31,\t2011 | 298.3 | $20.12 |
| Grants | 13.5 | $27.01 |
| Exercises | (85.8) | $20.45 |
| Cancellations\tand\tforfeitures | (3.9) | $21.17 |
| Expirations | (19.3) | $22.45 |
| December\t29,\t2012 | 202.8 | $20.20 |
| Grants | 20.1 | $22.99 |
| Exercises | (65.0) | $18.76 |
| Cancellations\tand\tforfeitures | (3.0) | $22.58 |
| Expirations | (1.9) | $22.56 |
| December\t28,\t2013 | 153.0 | $21.10 |
| Options\texercisable\tas\tof: |  |  |
| December\t31,\t2011 | 203.6 | $20.44 |
| December\t29,\t2012 | 139.8 | $19.76 |
| December\t28,\t2013 | 111.5 | $20.25 |

The	aggregate	intrinsic	value	of	stock	option	exercises	in	2013	was	$265	million	($517	million	in	2012	and	$318	million	in	2011),	which	represents	the difference	between	the	exercise	price	and	the	value	of	Intel	common	stock	at	the	time	of	exercise.

The	following	table	summarizes	information	about	options	outstanding	as	of	 December	28,	2013:

|  |  |  |  | Remaining |  | Weighted |  | Weighted |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | Number\tof | Contractual |  | Average | Number\tof | Average |
| Range\tof\tExercise\tPrices | Range\tof\tExercise\tPrices | Range\tof\tExercise\tPrices | Shares\n(In\tMillions) | Life\n(In\tYears) |  | Exercise\nPrice | Shares\n(In\tMillions) | Exercise\nPrice |
| $1.12 | - | $15.00 | 2.2 |  | 3.7 | $12.22 | 1.2 | $11.69 |
| $15.01 | - | $20.00 | 70.5 |  | 2.7 | $18.22 | 70.4 | $18.20 |
| $20.01 | - | $25.00 | 57.6 |  | 4.2 | $22.59 | 26.2 | $22.54 |
| $25.01 | - | $30.00 | 22.4 |  | 3.0 | $27.09 | 13.4 | $27.02 |
| $30.01 | - | $33.03 | 0.3 |  | 0.1 | $32.31 | 0.3 | $32.31 |
| Total |  |  | 153.0 |  | 3.3 | $21.10 | 111.5 | $20.25 |

These	options	will	expire	if	they	are	not	exercised	by	specific	dates	through	April	2021.	Option	exercise	prices	for	options	exercised	during	the	three-year period	ended	December	28,	2013,	ranged	from	$1.12	to	$28.15.

# Stock	Purchase	Plan

Approximately	76%	of	our	employees	were	participating	in	our	2006	Stock	Purchase	Plan	as	of	 December	28,	2013	(72%	in	2012	and	70%	in	2011). Employees	purchased	20.5	million	shares	in	2013	for	$369	million	under	the	2006	Stock	Purchase	Plan	(17.4	million	shares	for	$355	million	in	2012	and 18.5	million	shares	for	$318	million	in	2011).	As	of	December	28,	2013,	there	was	$13	million	in	unrecognized	compensation	costs	related	to	rights	to acquire	common	stock	under	our	stock	purchase	plan.	We	expect	to	recognize	those	costs	over	a	period	of	approximately	one	and	a	half	months.

# Note	20:	Common	Stock	Repurchases

# Common	Stock	Repurchase	Program

We	have	an	ongoing	authorization,	originally	approved	by	our	Board	of	Directors	in	October	2005,	and	subsequently	amended,	 to	repurchase	up	to	$45 billion	in	shares	of	our	common	stock	in	open	market	or	negotiated	transactions.	As	of	 December	28,	2013,	$3.2	billion	remained	available	for	repurchase under	the	existing	repurchase	authorization	limit.	During	2013,	we	repurchased	94.1	million	shares	of	common	stock	at	a	cost	of	 $2.1	billion	(191.0	million shares	of	common	stock	at	a	cost	of	$4.8	billion	in	2012	and	642.3	million	shares	of	common	stock	at	a	cost	of	 $14.1	billion	in	2011).	We	have repurchased	4.4	billion	shares	at	a	cost	of	 $91	billion	since	the	program	began	in	1990.

# Restricted	Stock	Unit	Withholdings

We	issue	restricted	stock	units	as	part	of	our	equity	incentive	plans.	For	the	majority	of	restricted	stock	units	granted,	the	number	of	shares	issued	on	the date	the	restricted	stock	units	vest	is	net	of	the	minimum	statutory	withholding	requirements	that	we	pay	in	cash	to	the	appropriate	taxing	authorities	on behalf	of	our	employees.	In	our	consolidated	financial	statements,	we	also	treat	shares	withheld	for	tax	purposes	on	behalf	of	our	employees	in	connection with	the	vesting	of	restricted	stock	units	as	common	stock	repurchases	because	they	reduce	the	number	of	shares	that	would	have	been	issued	upon vesting.	These	withheld	shares	are	not	considered	common	stock	repurchases	under	our	authorized	common	stock	repurchase	plan.	During	2013,	we withheld	13.1	million	shares	to	satisfy	$293	million	of	employees'	tax	obligations	(12.6	million	shares	to	satisfy	$345	million	during	2012	and	10.3	million shares	to	satisfy	$207	million	during	2011).

# Note	21:	Gains	(Losses)	on	Equity	Investments,	Net

Gains	(losses)	on	equity	investments,	net	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Share\tof\tequity\tmethod\tinvestee\tlosses,\tnet | $(69) | $(81) | $(204) |
| Impairment\tcharges | (123) | (154) | (132) |
| Gains\ton\tsales,\tnet | 515 | 183 | 303 |
| Dividends | 46 | — | — |
| Other,\tnet | 102 | 193 | 145 |
| Total\tgains\t(losses)\ton\tequity\tinvestments,\tnet | $471 | $141 | $112 |

Gains	on	sales,	net	for	2013	included	gains	of	 $439	million	on	the	sales	of	our	interest	in	Clearwire	LLC	and	our	shares	in	Clearwire	Corporation	in	the third	quarter	of	2013.	For	further	information	on	these	transactions,	see	"Note	5:	Cash	and	Investments."

# Note	22:	Interest	and	Other,	Net

The	components	of	interest	and	other,	net	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Interest\tincome | $104 | $97 | $98 |
| Interest\texpense | (244) | (90) | (41) |
| Other,\tnet | (11) | 87 | 135 |
| Total\tinterest\tand\tother,\tnet | $(151) | $94 | $192 |

Interest	expense	in	the	preceding	table	is	net	of	$246	million	of	interest	capitalized	in	2013	($240	million	in	2012	and	$150	million	in	2011).	In	2011,	we recognized	a	gain	upon	forming	the	Intel	and	GE	joint	venture,	Care	Innovations,	of	$164	million,	which	is	included	within	"other,	net,"	in	the	preceding table.	For	further	information,	see	"Note	5:	Cash	and	Investments."

# Note	23:	Earnings	Per	Share

We	computed	our	basic	and	diluted	earnings	per	common	share	for	each	period	as	follows:

| (In	Millions,	Except	Per	Share	Amounts) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Net\tincome\tavailable\tto\tcommon\tstockholders | $9,620 | $11,005 | $12,942 |
| Weighted\taverage\tcommon\tshares\toutstanding—basic | 4,970 | 4,996 | 5,256 |
| Dilutive\teffect\tof\temployee\tequity\tincentive\tplans | 68 | 100 | 101 |
| Dilutive\teffect\tof\tconvertible\tdebt | 59 | 64 | 54 |
| Weighted\taverage\tcommon\tshares\toutstanding—diluted | 5,097 | 5,160 | 5,411 |
| Basic\tearnings\tper\tcommon\tshare | $1.94 | $2.20 | $2.46 |
| Diluted\tearnings\tper\tcommon\tshare | $1.89 | $2.13 | $2.39 |

We	computed	basic	earnings	per	common	share	using	net	income	available	to	common	stockholders	and	the	weighted	average	number	of	common shares	outstanding	during	the	period.	We	computed	diluted	earnings	per	common	share	using	net	income	available	to	common	stockholders	and	the weighted	average	number	of	common	shares	outstanding	plus	potentially	dilutive	common	shares	outstanding	during	the	period.	Net	income	available	to participating	securities	was	insignificant	for	all	periods	presented.

Potentially	dilutive	common	shares	from	employee	incentive	plans	are	determined	by	applying	the	treasury	stock	method	to	the	assumed	exercise	of outstanding	stock	options,	the	assumed	vesting	of	outstanding	restricted	stock	units,	and	the	assumed	issuance	of	common	stock	under	the	stock purchase	plan.	Potentially	dilutive	common	shares	are	determined	by	applying	the	if-converted	method	for	our	2005	debentures.	However,	as	our	2009 debentures	require	settlement	of	the	principal	amount	of	the	debt	in	cash	upon	conversion,	with	the	conversion	premium	paid	in	cash	or	stock	at	our option,	potentially	dilutive	common	shares	are	determined	by	applying	the	treasury	stock	method.	For	further	discussion	on	the	specific	conversion features	of	our	2005	and	2009	debentures,	see	"Note	16:	Borrowings."

In	2013,	we	excluded	on	average	55	million	outstanding	stock	options	and	restricted	stock	units	(29	million	in	2012	and	90	million	in	2011)	from	the computation	of	diluted	earnings	per	common	share	because	these	would	have	been	antidilutive.	These	options	could	potentially	be	included	in	the	dilutive earnings	per	common	share	calculation	in	the	future	if	the	average	market	value	of	the	common	shares	increases	and	is	greater	than	the	exercise	price	of these	options.

In	2013,	2012,	and	2011,	we	included	our	2009	debentures	in	the	calculation	of	diluted	earnings	per	common	share	because	the	average	market	price was	above	the	conversion	price.	We	could	potentially	exclude	the	2009	debentures	again	in	the	future	if	the	average	market	price	is	below	the	conversion price.

# Note	24:	Income	Taxes

# Income	Tax	Provision

Income	before	taxes	and	the	provision	for	taxes	consisted	of	the	following:

| (Dollars	in	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Income\tbefore\ttaxes: |  |  |  |
| U.S. | $9,374 | $10,042 | $14,659 |
| Non-U.S. | 3,237 | 4,831 | 3,122 |
| Total\tincome\tbefore\ttaxes | $12,611 | $14,873 | $17,781 |
| Provision\tfor\ttaxes: |  |  |  |
| Current: |  |  |  |
| Federal | $2,730 | $2,539 | $3,212 |
| State | 68 | 52 | 104 |
| Non-U.S. | 716 | 1,135 | 374 |
| Total\tcurrent\tprovision\tfor\ttaxes | $3,514 | $3,726 | $3,690 |
| Deferred: |  |  |  |
| Federal | $(412) | $129 | $1,175 |
| Other | (111) | 13 | (26) |
| Total\tdeferred\tprovision\tfor\ttaxes | $(523) | $142 | $1,149 |
| Total\tprovision\tfor\ttaxes | $2,991 | $3,868 | $4,839 |
| Effective\ttax\trate | 23.7% | 26.0% | 27.2% |

The	difference	between	the	tax	provision	at	the	statutory	federal	income	tax	rate	and	the	tax	provision	as	a	percentage	of	income	before	income	taxes (effective	tax	rate)	for	each	period	was	as	follows:

|  | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Statutory\tfederal\tincome\ttax\trate | 35.0\t% | 35.0\t% | 35.0\t% |
| Increase\t(reduction)\tin\trate\tresulting\tfrom: |  |  |  |
| Non-U.S.\tincome\ttaxed\tat\tdifferent\trates | (5.8) | (7.3) | (4.4) |
| Research\tand\tdevelopment\ttax\tcredits | (3.5) | — | (1.0) |
| Domestic\tmanufacturing\tdeduction\tbenefit | (2.1) | (2.1) | (1.9) |
| Other | 0.1 | 0.4 | (0.5) |
| Effective\ttax\trate | 23.7\t% | 26.0\t% | 27.2\t% |

The	U.S.	R&D	tax	credit	was	reenacted	in	January	2013	retroactive	to	the	beginning	of	2012.	The	full	year	2012	impact	of	the	U.S.	R&D	tax	credit	was recognized	in	the	first	quarter	of	2013.

Income	in	certain	non-U.S.	countries	is	fully	exempt	from	income	taxes	for	a	limited	period	of	time	due	to	eligible	activities	and	certain	capital	investment actions.	These	full	tax	exemptions	expire	at	various	dates	through	2020;	however,	the	exemptions	in	certain	countries	are	eligible	for	renewal.	In	 2013,	the tax	benefit	attributable	to	tax	holidays	was	$213	million	($252	million	for	2012	and	$554	million	for	2011)	with	a	$0.04	impact	on	diluted	earnings	per	share ($0.05	for	2012	and	$0.10	for	2011).

During	2013,	net	income	tax	benefits	attributable	to	equity-based	compensation	transactions	that	were	allocated	to	stockholders'	equity	totaled $3	million (net	benefits	of	$137	million	in	2012	and	net	deficiencies	of	$18	million	in	2011).

# Deferred	and	Current	Income	Taxes

Deferred	income	taxes	reflect	the	net	tax	effects	of	temporary	differences	between	the	carrying	amounts	of	assets	and	liabilities	for	financial	reporting purposes	and	the	amounts	for	income	tax	purposes.	Significant	components	of	our	deferred	tax	assets	and	liabilities	at	the	end	of	each	period	were	as follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 |
| :--- | :--- | :--- |
| Deferred\ttax\tassets: |  |  |
| Accrued\tcompensation\tand\tother\tbenefits | $1,047 | $1,125 |
| Share-based\tcompensation | 564 | 638 |
| Deferred\tincome | 672 | 637 |
| Inventory | 733 | 506 |
| Unrealized\tlosses\ton\tinvestments\tand\tderivatives | — | 36 |
| State\tcredits\tand\tnet\toperating\tlosses | 378 | 297 |
| Other,\tnet | 654 | 654 |
| Gross\tdeferred\ttax\tassets | 4,048 | 3,893 |
| Valuation\tallowance | (456) | (389) |
| Total\tdeferred\ttax\tassets | $3,592 | $3,504 |
| Deferred\ttax\tliabilities: |  |  |
| Property,\tplant\tand\tequipment | $(2,023) | $(2,325) |
| Licenses\tand\tintangibles | (687) | (778) |
| Convertible\tdebt | (911) | (856) |
| Unrealized\tgains\ton\tinvestments\tand\tderivatives | (815) | — |
| Investment\tin\tnon-U.S.\tsubsidiaries | (244) | (213) |
| Other,\tnet | (281) | (269) |
| Total\tdeferred\ttax\tliabilities | $(4,961) | $(4,441) |
| Net\tdeferred\ttax\tassets\t(liabilities) | $(1,369) | $(937) |
| Reported\tas: |  |  |
| Current\tdeferred\ttax\tassets | $2,594 | $2,117 |
| Non-current\tdeferred\ttax\tassets | 434 | 358 |
| Non-current\tdeferred\ttax\tliabilities | (4,397) | (3,412) |
| Net\tdeferred\ttax\tassets\t(liabilities) | $(1,369) | $(937) |

Non-current	deferred	tax	assets	are	included	within	other	long-term	assets	on	the	consolidated	balance	sheets.

The	valuation	allowance	is	based	on	our	assessment	that	it	is	more	likely	than	not	that	certain	deferred	tax	assets	will	not	be	realized	in	the	foreseeable future.	The	valuation	allowance	as	of	December	28,	2013,	included	allowances	related	to	unrealized	state	credit	carryforwards	of	 $364	million	and	matters related	to	our	non-U.S.	subsidiaries	of	$92	million.

As	of	December	28,	2013,	our	federal,	state,	and	non-U.S.	net	operating	loss	carryforwards	for	income	tax	purposes	were	 $239	million,	$353	million,	and $647	million,	respectively.	Approximately	half	of	the	non-U.S.	net	operating	loss	carryforwards	have	no	expiration	date.	The	remaining	non-U.S.	as	well	as the	U.S.	federal	and	state	net	operating	loss	carryforwards	expire	at	various	dates	through	2033.	A	significant	amount	of	the	net	operating	loss carryforwards	in	the	U.S.	relates	to	acquisitions	and,	as	a	result,	is	limited	in	the	amount	that	can	be	recognized	in	any	one	year.	The	non-U.S.	net operating	loss	carryforwards	include	$342	million	that	is	not	likely	to	be	recovered	and	has	been	reduced	by	a	valuation	allowance.

As	of	December	28,	2013,	we	had	not	recognized	U.S.	deferred	income	taxes	on	a	cumulative	total	of	 $20.0	billion	of	undistributed	earnings	for	certain non-U.S.	subsidiaries	and	$2.4	billion	of	other	basis	differences	of	our	investments	in	certain	non-U.S.	subsidiaries	primarily	related	to	McAfee. Determining	the	unrecognized	deferred	tax	liability	related	to	investments	in	these	non-U.S.	subsidiaries	that	are	indefinitely	reinvested	is	not	practicable. We	currently	intend	to	indefinitely	reinvest	those	earnings	and	other	basis	differences	in	operations	outside	the	U.S.

Current	income	taxes	receivable	of	$65	million	as	of	December	28,	2013,	($866	million	as	of	December	29,	2012)	is	included	in	other	current	assets. Current	income	taxes	payable	of	$542	million	as	of	December	28,	2013,	($711	million	as	of	December	29,	2012)	is	included	in	other	accrued	liabilities.

Long-term	income	taxes	payable	of	$188	million	as	of	December	28,	2013,	($177	million	as	of	December	29,	2012)	within	other	long-term	liabilities, includes	uncertain	tax	positions,	reduced	by	the	associated	federal	deduction	for	state	taxes	and	non-U.S.	tax	credits,	and	may	also	include	other	long- term	tax	liabilities	that	are	not	uncertain	but	have	not	yet	been	paid.

# Uncertain	Tax	Positions

The	aggregate	changes	in	the	balance	of	gross	unrecognized	tax	benefits	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Beginning\tgross\tunrecognized\ttax\tbenefits | $189 | $212 | $216 |
| Settlements\tand\teffective\tsettlements\twith\ttax\tauthorities\tand\trelated\tremeasurements | (2) | (81) | (63) |
| Lapse\tof\tstatute\tof\tlimitations | — | (5) | (17) |
| Increases\tin\tbalances\trelated\tto\ttax\tpositions\ttaken\tduring\tprior\tperiods | 21 | 56 | 91 |
| Decreases\tin\tbalances\trelated\tto\ttax\tpositions\ttaken\tduring\tprior\tperiods | (9) | (6) | (21) |
| Increases\tin\tbalances\trelated\tto\ttax\tpositions\ttaken\tduring\tcurrent\tperiod | 8 | 13 | 6 |
| Ending\tgross\tunrecognized\ttax\tbenefits | $207 | $189 | $212 |

During	2013,	we	settled	and	effectively	settled	matters	with	certain	state	and	non-U.S.	tax	authorities	relating	to	tax	positions	taken	during	prior	periods. The	result	of	the	settlements,	effective	settlements,	and	re-measurements	resulted	in	an	insignificant	reduction	in	the	balance	of	our	gross	unrecognized tax	benefits	in	2013	($81	million	in	2012	and	$63	million	in	2011).	The	related	tax	benefit	for	settlements,	effective	settlements,	and	re-measurements	is insignificant	for	2013	($7	million	for	2012	and	$61	million	for	2011).

If	the	remaining	balance	of	$207	million	of	unrecognized	tax	benefits	as	of	 December	28,	2013,	($189	million	as	of	December	29,	2012)	were	realized	in	a future	period,	it	would	result	in	a	tax	benefit	of	$81	million	and	a	reduction	in	the	effective	tax	rate	($66	million	as	of	December	29,	2012).

During	all	years	presented,	we	recognized	interest	and	penalties	related	to	unrecognized	tax	benefits	within	the	provision	for	taxes	on	the	consolidated statements	of	income.	Interest	and	penalties	related	to	unrecognized	tax	benefits	were	insignificant	in	2013	(insignificant	in	2012	and	$24	million	in	2011). As	of	December	28,	2013,	we	had	$73	million	of	accrued	interest	and	penalties	related	to	unrecognized	tax	benefits	( $66	million	as	of	December	29, 2012).

Although	the	timing	of	the	resolutions	and/or	closures	of	audits	is	highly	uncertain,	it	is	reasonably	possible	that	certain	non-U.S.	tax	audits	may	be concluded	within	the	next	12	months	which	could	significantly	increase	or	decrease	the	balance	of	our	gross	unrecognized	tax	benefits.	However,	the estimated	impact	to	income	tax	expense	and	net	income	is	not	expected	to	be	significant.

We	file	federal,	state,	and	non-U.S.	tax	returns.	For	state	and	non-U.S.	tax	returns,	we	are	generally	no	longer	subject	to	tax	examinations	for	years	prior to	2001.	For	federal	tax	returns,	we	are	no	longer	subject	to	tax	examination	for	years	prior	to	 2009.

# Note	25:	Other	Comprehensive	Income	(Loss)

The	components	of	other	comprehensive	income	(loss)	and	related	tax	effects	for	each	period	were	as	follows:

|  |  | 2013 |  |  | 2012 |  |  | 2011 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Before\nTax | Tax | Net\tof\nTax | Before\nTax | Tax | Net\tof\nTax | Before\nTax | Tax | Net\tof\nTax |
| Change\tin\tunrealized |  |  |  |  |  |  |  |  |  |
| holding\tgains\t(losses) |  |  |  |  |  |  |  |  |  |
| on\tavailable-for-sale |  |  |  |  |  |  |  |  |  |
| investments | $1,963 | $(687) | $1,276 | $909 | $(318) | $591 | $35 | $(13) | $22 |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| (gains)\tlosses\ton |  |  |  |  |  |  |  |  |  |
| available-for-sale |  |  |  |  |  |  |  |  |  |
| investments\tincluded |  |  |  |  |  |  |  |  |  |
| in\tnet\tincome | (146) | 51 | (95) | (187) | 66 | (121) | (299) | 107 | (192) |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| (gains)\tlosses\ton |  |  |  |  |  |  |  |  |  |
| deferred\ttax\tasset |  |  |  |  |  |  |  |  |  |
| valuation\tallowance |  |  |  |  |  |  |  |  |  |
| included\tin\tnet |  |  |  |  |  |  |  |  |  |
| income | — | (26) | (26) | — | (11) | (11) | — | (99) | (99) |
| Change\tin\tunrealized |  |  |  |  |  |  |  |  |  |
| holding\tgains\t(losses) |  |  |  |  |  |  |  |  |  |
| on\tderivatives | (166) | 76 | (90) | 12 | 8 | 20 | 20 | (16) | 4 |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| amortization\tof |  |  |  |  |  |  |  |  |  |
| (gains)\tlosses\ton |  |  |  |  |  |  |  |  |  |
| derivatives | 30 | (29) | 1 | 78 | (13) | 65 | (161) | 38 | (123) |
| Change\tin\tnet\tprior\nservice\tcosts | 17 | (2) | 15 | (4) | 1 | (3) | — | — | — |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| amortization\tof\tnet |  |  |  |  |  |  |  |  |  |
| prior\tservice\tcosts | 4 | (1) | 3 | 5 | (2) | 3 | 7 | (3) | 4 |
| Change\tin\tactuarial\nvaluation | 725 | (275) | 450 | (321) | 91 | (230) | (900) | 284 | (616) |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| amortization\tof |  |  |  |  |  |  |  |  |  |
| actuarial\t(gains) |  |  |  |  |  |  |  |  |  |
| losses | 101 | (31) | 70 | 90 | (32) | 58 | 43 | (15) | 28 |
| Change\tin\tnet\tforeign |  |  |  |  |  |  |  |  |  |
| currency\ttranslation |  |  |  |  |  |  |  |  |  |
| adjustment | 45 | (7) | 38 | 12 | (2) | 10 | (155) | 13 | (142) |
| Other\tcomprehensive\nincome\t(loss) | $2,573 | $(931) | $1,642 | $594 | $(212) | $382 | $(1,410) | $296 | $(1,114) |

In	prior	periods,	we	recorded	a	reversal	of	a	portion	of	our	deferred	tax	asset	valuation	allowance	attributed	to	changes	in	unrealized	holding	gains	on	our available-for-sale	investments.	This	amount	is	reduced	and	included	in	our	provision	for	taxes	as	these	investments	mature	or	are	sold,	and	is	included	in the	preceding	table	as	an	adjustment	for	(gains)	losses	on	deferred	tax	asset	valuation	allowance	included	in	net	income.

The	changes	in	accumulated	other	comprehensive	income	(loss)	by	component	and	related	tax	effects	for	each	period	were	as	follows:

| (In	Millions) | (Losses)	on<br>Available-for-<br>Sale<br>Investments | Deferred	Tax<br>Asset	Valuation<br>Allowance | Unrealized<br>Holding	Gains<br>(Losses)	on<br>Derivatives | Prior	Service<br>Credits	(Costs) | Actuarial	Gains<br>(Losses) | Foreign<br>Currency<br>Translation<br>Adjustment | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2011 | $231 | $104 | $8 | $(32) | $(950) | $(142) | $(781) |
| Other\tcomprehensive\tincome\nbefore\treclassifications | 909 | — | 12 | (4) | (321) | 12 | 608 |
| Amounts\treclassified\tout\tof |  |  |  |  |  |  |  |
| accumulated\tother |  |  |  |  |  |  |  |
| comprehensive\tincome | (187) | — | 78 | 5 | 90 | — | (14) |
| Tax\teffects | (252) | (11) | (5) | (1) | 59 | (2) | (212) |
| Other\tcomprehensive\tincome\n(loss) | 470 | (11) | 85 | — | (172) | 10 | 382 |
| December\t29,\t2012 | $701 | $93 | $93 | $(32) | $(1,122) | $(132) | $(399) |
| Other\tcomprehensive\tincome\nbefore\treclassifications | 1,963 | — | (166) | 17 | 725 | 45 | 2,584 |
| Amounts\treclassified\tout\tof |  |  |  |  |  |  |  |
| accumulated\tother |  |  |  |  |  |  |  |
| comprehensive\tincome | (146) | — | 30 | 4 | 101 | — | (11) |
| Tax\teffects | (636) | (26) | 47 | (3) | (306) | (7) | (931) |
| Other\tcomprehensive\tincome\n(loss) | 1,181 | (26) | (89) | 18 | 520 | 38 | 1,642 |
| December\t28,\t2013 | $1,882 | $67 | $4 | $(14) | $(602) | $(94) | $1,243 |

The	amounts	reclassified	out	of	accumulated	other	comprehensive	income	into	the	consolidated	statements	of	income,	with	presentation	location,	for	each period	were	as	follows:

|  | 2013 | 2012 | 2011 |  |
| :--- | :--- | :--- | :--- | :--- |
| Comprehensive\tIncome\tComponents | Income\tBefore\tTaxes\tImpact\t(In\tMillions) | Income\tBefore\tTaxes\tImpact\t(In\tMillions) |  | Location |
| Unrealized\tholding\tgains\t(losses)\ton\tavailable-\nfor-sale\tinvestments |  |  |  |  |
|  | $8 | $(8) | $(7) | Interest\tand\tother,\tnet |
|  |  |  |  | Gains\t(losses)\ton\tequity\tinvestments, |
|  | 138 | 195 | 306 | net |
|  | 146 | 187 | 299 |  |
| Unrealized\tholding\tgains\t(losses)\ton\nderivatives |  |  |  |  |
| Currency\tforwards | (61) | 11 | 118 | \t Cost\tof\tsales |
|  | 30 | (63) | 20 | \t Research\tand\tdevelopment |
|  | — | (25) | 19 | \t Marketing,\tgeneral\tand\tadministrative |
| Other\tinstruments | 1 | (1) | 4 | \t Cost\tof\tsales |
|  | (30) | (78) | 161 |  |
| Amortization\tof\tpension\tand\tpostretirement\nbenefit\tcomponents |  |  |  |  |
| Prior\tservice\tcredits\t(costs) | (4) | (5) | (7) |  |
| Actuarial\tgains\t(losses) | (101) | (90) | (43) |  |
|  | (105) | (95) | (50) |  |
| Total\tamounts\treclassified\tout\tof |  |  |  |  |
| accumulated\tother\tcomprehensive |  |  |  |  |
| income | $11 | $14 | $410 |  |

The	amortization	of	pension	and	postretirement	benefit	components	are	included	in	the	"Net	Periodic	Benefit	Cost"	section	of	" Note	17:	Retirement	Benefit Plans".	The	estimated	net	prior	service	costs	and	net	actuarial	gains	(losses)	for	the	defined	benefit	plans	that	will	be	amortized	from	accumulated	other comprehensive	income	(loss)	into	net	periodic	benefit	cost	during	2014	are	$4	million	and	$39	million,	respectively.

We	estimate	that	we	will	reclassify	approximately	 $6	million	(before	taxes)	of	net	derivative	losses	included	in	accumulated	other	comprehensive	income (loss)	into	earnings	within	the	next	12	months.

# Note	26:	Contingencies

# Legal	Proceedings

We	are	a	party	to	various	legal	proceedings,	including	those	noted	in	this	section.	Although	management	at	present	believes	that	the	ultimate	outcome	of these	proceedings,	individually	and	in	the	aggregate,	will	not	materially	harm	our	financial	position,	results	of	operations,	cash	flows,	or	overall	trends, legal	proceedings	and	related	government	investigations	are	subject	to	inherent	uncertainties,	and	unfavorable	rulings	or	other	events	could	occur. Unfavorable	resolutions	could	include	substantial	monetary	damages.	In	addition,	in	matters	for	which	injunctive	relief	or	other	conduct	remedies	are sought,	unfavorable	resolutions	could	include	an	injunction	or	other	order	prohibiting	us	from	selling	one	or	more	products	at	all	or	in	particular	ways, precluding	particular	business	practices,	or	requiring	other	remedies.	Were	unfavorable	outcomes	to	occur,	the	possibility	exists	for	a	material	adverse impact	on	our	business,	results	of	operations,	financial	position,	and	overall	trends.	We	might	also	conclude	that	settling	one	or	more	such	matters	is	in	the best	interests	of	our	stockholders,	employees,	and	customers,	and	any	such	settlement	could	include	substantial	payments.	However,	we	have	not reached	this	conclusion	with	respect	to	any	particular	matter	at	this	time.

A	number	of	proceedings	generally	have	challenged	and	continue	to	challenge	certain	of	our	competitive	practices.	The	allegations	in	these	proceedings vary	and	are	described	in	more	detail	in	the	following	paragraphs.	In	general,	they	contend	that	we	improperly	conditioned	price	rebates	and	other discounts	on	our	microprocessors	on	exclusive	or	near-exclusive	dealing	by	some	of	our	customers;	and	they	allege	that	our	software	compiler	business unfairly	preferred	Intel	microprocessors	over	competing	microprocessors	and	that,	through	the	use	of	our	compilers	and	other	means,	we	have	caused	the dissemination	of	inaccurate	and	misleading	benchmark	results	concerning	our	microprocessors.	Based	on	the	procedural	posture	of	the	various	remaining competition	matters,	which	we	describe	in	subsequent	paragraphs,	our	investment	of	resources	to	explain	and	defend	our	position	has	declined	as compared	to	the	period	2005-2011.	Nonetheless,	certain	of	the	matters	remain	active,	and	these	challenges	could	continue	for	a	number	of	years, potentially	requiring	us	to	invest	additional	resources.	We	believe	that	we	compete	lawfully	and	that	our	marketing,	business,	intellectual	property,	and other	challenged	practices	benefit	our	customers	and	our	stockholders,	and	we	will	continue	to	conduct	a	vigorous	defense	in	the	remaining	proceedings.

# Government	Competition	Matters	and	Related	Consumer	Class	Actions

In	2001,	the	European	Commission	(EC)	commenced	an	investigation	regarding	claims	by	Advanced	Micro	Devices,	Inc.	(AMD)	that	we	used	unfair business	practices	to	persuade	customers	to	buy	our	microprocessors.	We	received	numerous	requests	for	information	and	documents	from	the	EC	and we	responded	to	each	of	those	requests.	The	EC	issued	a	Statement	of	Objections	in	July	2007	and	held	a	hearing	on	that	Statement	in	March	2008.	The EC	issued	a	Supplemental	Statement	of	Objections	in	July	2008.

In	May	2009,	the	EC	issued	a	decision	finding	that	we	had	violated	Article	82	of	the	EC	Treaty	and	Article	54	of	the	European	Economic	Area	Agreement. In	general,	the	EC	found	that	we	violated	Article	82	(later	renumbered	as	Article	102	by	a	new	treaty)	by	offering	alleged	"conditional	rebates	and payments"	that	required	our	customers	to	purchase	all	or	most	of	their	x86	microprocessors	from	us.	The	EC	also	found	that	we	violated	Article	82	by making	alleged	"payments	to	prevent	sales	of	specific	rival	products."	The	EC	imposed	a	fine	in	the	amount	of	€1.06	billion	($1.447	billion	as	of	May 2009),	which	we	subsequently	paid	during	the	third	quarter	of	2009,	and	ordered	us	to	"immediately	bring	to	an	end	the	infringement	referred	to	in "	the	EC decision.	In	the	second	quarter	of	2009,	we	recorded	the	related	charge	within	marketing,	general	and	administrative.	We	strongly	disagree	with	the	EC's decision,	and	we	appealed	the	decision	to	the	Court	of	First	Instance	(which	has	been	renamed	the	General	Court)	in	July	2009.	The	hearing	of	our appeal	took	place	on	July	3	through	July	6,	2012.	The	court's	decision	is	expected	in	2014.

The	EC	decision	exceeds	500	pages	but	contains	no	specific	direction	on	whether	or	how	we	should	modify	our	business	practices.	Instead,	the	decision states	that	we	should	"cease	and	desist"	from	further	conduct	that,	in	the	EC's	opinion,	would	violate	applicable	law.	We	have	taken	steps,	which	are subject	to	the	EC's	ongoing	review,	to	comply	with	that	decision	pending	appeal.	We	had	discussions	with	the	EC	to	better	understand	the	decision	and	to explain	changes	to	our	business	practices.	Based	on	our	current	understanding	and	expectations,	we	do	not	believe	that	any	such	changes	will	be material	to	our	financial	position,	results,	or	cash	flows.

In	June	2005,	we	received	an	inquiry	from	the	Korea	Fair	Trade	Commission	(KFTC)	requesting	documents	from	our	Korean	subsidiary	related	to marketing	and	rebate	programs	that	we	entered	into	with	Korean	PC	manufacturers.	In	February	2006,	the	KFTC	initiated	an	inspection	of	documents	at our	offices	in	Korea.	In	September	2007,	the	KFTC	served	on	us	an	Examination	Report	alleging	that	sales	to	two	customers	during	parts	of	2002-2005 violated	Korea's	Monopoly	Regulation	and	Fair	Trade	Act.	In	December	2007,	we	submitted	our	written	response	to	the	KFTC.	In	February	2008,	the KFTC's	examiner	submitted	a	written	reply	to	our	response.	In	March	2008,	we	submitted	a	further	response.	In	April	2008,	we	participated	in	a	pre- hearing	conference	before	the	KFTC,	and	we	participated	in	formal	hearings	in	May	and	June	2008.	In	June	2008,	the	KFTC	announced	its	intent	to	fine us	approximately	$25	million	for	providing	discounts	to	Samsung	Electronics	Co.,	Ltd.	and	TriGem	Computer	Inc.	In	November	2008,	the	KFTC	issued	a final	written	decision	concluding	that	our	discounts	had	violated	Korean	antitrust	law	and	imposing	a	fine	on	us	of	approximately	$20	million,	which	we	paid in	January	2009.	In	December	2008,	we	appealed	this	decision	by	filing	a	lawsuit	in	the	Seoul	High	Court	seeking	to	overturn	the	KFTC's	decision.	In	June 2013,	the	Seoul	High	Court	rejected	Intel's	appeal	and	affirmed	the	KFTC's	findings,	including	the	imposition	of	the	fine.

At	least	82	separate	class-action	lawsuits	have	been	filed	in	the	U.S.	District	Courts	for	the	Northern	District	of	California,	Southern	District	of	California, District	of	Idaho,	District	of	Nebraska,	District	of	New	Mexico,	District	of	Maine,	and	District	of	Delaware,	as	well	as	in	various	California,	Kansas,	and Tennessee	state	courts.	These	actions	generally	repeat	the	allegations	made	in	a	now-settled	lawsuit	filed	against	us	by	AMD	in	June	2005	in	the	U.S. District	Court	for	the	District	of	Delaware	(AMD	litigation).	Like	the	AMD	litigation,	these	class-action	lawsuits	allege	that	we	engaged	in	various	actions	in violation	of	the	Sherman	Act	and	other	laws	by,	among	other	things:	providing	discounts	and	rebates	to	our	manufacturer	and	distributor	customers conditioned	on	exclusive	or	near-exclusive	dealing	that	allegedly	unfairly	interfered	with	AMD's	ability	to	sell	its	microprocessors;	interfering	with	certain AMD	product	launches;	and	interfering	with	AMD's	participation	in	certain	industry	standards-setting	groups.	The	class	actions	allege	various	consumer injuries,	including	that	consumers	in	various	states	have	been	injured	by	paying	higher	prices	for	computers	containing	our	microprocessors.	We	dispute these	class-action	claims	and	intend	to	defend	the	lawsuits	vigorously.

All	of	the	federal	class	actions	and	the	Kansas	and	Tennessee	state	court	class	actions	have	been	transferred	by	the	Multidistrict	Litigation	Panel	to	the U.S.	District	Court	in	Delaware	for	all	pre-trial	proceedings	and	discovery	(MDL	proceedings).	The	Delaware	district	court	appointed	a	Special	Master	to address	issues	in	the	MDL	proceedings,	as	assigned	by	the	court.	In	January	2010,	the	plaintiffs	in	the	Delaware	action	filed	a	motion	for	sanctions	for	our alleged	failure	to	preserve	evidence.	This	motion	largely	copies	a	motion	previously	filed	by	AMD	in	the	AMD	litigation,	which	has	settled.	The	plaintiffs	in the	MDL	proceedings	also	moved	for	certification	of	a	class	of	members	who	purchased	certain	PCs	containing	products	sold	by	us.	In	July	2010,	the Special	Master	issued	a	Report	and	Recommendation	(Report)	denying	the	motion	to	certify	a	class.	The	MDL	plaintiffs	filed	objections	to	the	Special Master's	Report,	and	a	hearing	on	those	objections	was	held	in	March	2011.	In	September	2012,	the	court	ruled	that	an	evidentiary	hearing	would	be necessary	to	enable	the	court	to	rule	on	the	objections	to	the	Special	Master's	Report,	to	resolve	the	motion	to	certify	the	class,	and	to	resolve	a	separate motion	to	exclude	certain	testimony	and	evidence	from	the	MDL	plaintiffs'	expert.	The	hearing	occurred	in	July	2013,	and	we	are	awaiting	the	court's decision	on	the	class	certification	issues.

All	California	class	actions	have	been	consolidated	in	the	Superior	Court	of	California	in	Santa	Clara	County.	The	plaintiffs	in	the	California	actions	have moved	for	class	certification,	which	we	are	in	the	process	of	opposing.	At	our	request,	the	court	in	the	California	actions	has	agreed	to	delay	ruling	on	this motion	until	after	the	Delaware	district	court	rules	on	the	similar	motion	in	the	MDL	proceedings.	Given	the	procedural	posture	and	the	nature	of	these cases,	including	the	fact	that	the	Delaware	district	court	has	not	determined	whether	the	matters	before	it	may	proceed	as	a	class	action,	we	are	unable	to make	a	reasonable	estimate	of	the	potential	loss	or	range	of	losses,	if	any,	arising	from	these	matters.

# In	re	High	Tech	Employee	Antitrust	Litigation

Between	May	and	July	2011,	former	employees	of	Intel,	Adobe	Systems	Incorporated,	Apple	Inc.,	Google	Inc.,	Intuit	Inc.,	Lucasfilm	Ltd.,	and	Pixar	filed antitrust	class	action	lawsuits	in	the	California	Superior	Courts	alleging	that	these	companies	had	entered	into	a	conspiracy	to	suppress	the	compensation of	their	employees.	The	California	Superior	Court	lawsuits	were	removed	to	the	United	States	District	Court	for	the	Northern	District	of	California	and	were consolidated.	The	plaintiffs'	allegations	referenced	the	2009	and	2010	investigation	by	the	Department	of	Justice	(DOJ)	into	employment	practices	in	the technology	industry,	as	well	as	the	DOJ's	complaints	and	subsequent	stipulated	final	judgments	with	the	seven	companies	named	as	defendants	in	the lawsuits.	The	plaintiffs	allege	that	the	defendants	entered	into	certain	unlawful	agreements	not	to	cold	call	employees	of	particular	other	defendants	and that	there	was	an	overarching	conspiracy	among	the	defendants.	Plaintiffs	assert	one	such	agreement	specific	to	Intel,	namely	that	Intel	and	Google entered	into	an	agreement	starting	no	later	than	September	2007,	not	to	cold	call	each	other's	employees.

In	September	2011,	the	plaintiffs	filed	a	consolidated	amended	complaint,	captioned In	re	High	Tech	Employee	Antitrust	Litigation, 	which	asserts	the	same state	law	claims	as	the	state	court	complaints,	and	also	asserts	claims	under	Section	1	of	the	Sherman	Antitrust	Act	and	Section	4	of	the	Clayton	Antitrust Act.	Plaintiffs'	consolidated	amended	complaint	seeks	a	declaration	that	the	defendants '	alleged	actions	violated	the	antitrust	laws;	damages,	trebled	as provided	for	by	law	under	the	Sherman	Act	or	Clayton	Act;	restitution,	and	disgorgement;	and	attorneys'	fees	and	costs.	In	April	2012,	the	court	granted the	defendants'	motion	to	dismiss	plaintiffs'	state	law	claims	but	denied	defendants'	motion	to	dismiss	the	Sherman	Act	and	Clayton	Act	claims.

In	October	2013,	the	court	certified	a	class	consisting	of	approximately	 66,000	current	or	former	employees	of	the	seven	defendants.	This	so-called "technical	class"	consists	of	a	group	of	current	and	former	technical,	creative,	and	R&D	employees	at	each	of	the	defendants.	In	January	2014,	Intel	filed	a motion	for	summary	judgment	which	is	scheduled	for	hearing	in	March	2014.	Trial	is	scheduled	to	begin	in	late	May	2014.	Given	the	procedural	posture and	the	nature	of	this	case,	we	are	unable	to	make	a	reasonable	estimate	of	the	potential	loss	or	range	of	losses,	if	any,	that	might	arise	from	this	matter. We	dispute	the	plaintiffs'	claims	and	intend	to	defend	the	lawsuit	vigorously.

# Lehman	Brothers	Holdings	Inc.	and	Lehman	Brothers	OTC	Derivatives	Inc.	v.	Intel

In	May	2013,	Lehman	Brothers	OTC	Derivatives	Inc.	(LOTC)	and	Lehman	Brothers	Holdings	Inc.	(LBHI)	filed	an	adversary	complaint	in	the	United	States Bankruptcy	Court	in	the	Southern	District	of	New	York	asserting	claims	against	us	arising	from	a	2008	contract	between	Intel	and	LOTC.	Under	the	terms of	the	2008	contract,	we	prepaid	$1.0	billion	to	LOTC,	in	exchange	for	which	LOTC	was	required	to	deliver	to	us	on	or	before	September	29,	2008, quantities	of	Intel	common	stock	and	cash	determined	by	a	formula	set	forth	in	the	contract.	LOTC's	performance	under	the	contract	was	secured	by	$1.0 billion	of	cash	collateral.	Under	the	terms	of	the	contract,	LOTC	was	obligated	to	deliver	approximately	 50	million	shares	of	our	common	stock	to	us	on September	29,	2008.	LOTC	failed	to	deliver	any	Intel	common	stock	or	cash,	and	we	exercised	our	right	of	set-off	against	the	$1.0	billion	collateral.	LOTC and	LBHI	acknowledge	in	their	complaint	that	we	were	entitled	to	set	off	our	losses	against	the	collateral,	but	they	assert	that	we	withheld	collateral	in excess	of	our	losses	that	should	have	been	returned	to	LOTC.	The	complaint	asserts	a	claim	for	breach	of	contract,	a	claim	for	"turnover"	under	section 542(a)	of	the	Bankruptcy	Code,	and	a	claim	for	violation	of	the	automatic	stay	under	section	362(a)(3)	of	the	Bankruptcy	Code.	The	complaint	does	not expressly	quantify	the	amount	of	damages	claimed	but	does	assert	multiple	theories	of	damages	that	impliedly	seek	up	to	$312	million	of	alleged	excess collateral,	plus	interest	based	on	LOTC's	claimed	cost	of	borrowing.	In	June	2013,	we	filed	a	motion	to	dismiss	plaintiffs'	bankruptcy	claims	and	for	a determination	that	the	breach	of	contract	claim	is	"non-core"	under	the	Bankruptcy	Code.	The	bankruptcy	court	granted	our	motion	in	its	entirety	in December	2013.	In	January	2014,	based	on	the	bankruptcy	court's	ruling,	we	filed	a	motion	in	the	United	States	District	Court	for	the	Southern	District	of New	York	requesting	that	the	district	court	withdraw	its	reference	to	the	bankruptcy	court	of	plaintiffs'	adversary	complaint.	Given	the	procedural	posture and	the	nature	of	this	case,	including	that	discovery	has	just	begun,	we	are	unable	to	make	a	reasonable	estimate	of	the	potential	loss	or	range	of	losses, if	any,	that	might	arise	from	this	matter.	We	believe	that	we	acted	in	a	manner	consistent	with	our	contractual	rights,	and	we	intend	to	defend	against	any claim	to	the	contrary.

# McAfee,	Inc.	Shareholder	Litigation

On	August	19,	2010,	we	announced	that	we	had	agreed	to	acquire	all	of	McAfee's	common	stock	for	 $48.00	per	share.	Four	McAfee	shareholders	filed putative	class-action	lawsuits	in	Santa	Clara	County,	California	Superior	Court	challenging	the	proposed	transaction.	The	cases	were	ordered consolidated	in	September	2010.	Plaintiffs	filed	an	amended	complaint	that	named	former	McAfee	board	members,	McAfee	and	Intel	as	defendants,	and alleged	that	the	McAfee	board	members	breached	their	fiduciary	duties	and	that	McAfee	and	Intel	aided	and	abetted	those	breaches	of	duty.	The complaint	requested	rescission	of	the	merger	agreement,	such	other	equitable	relief	as	the	court	may	deem	proper,	and	an	award	of	damages	in	an unspecified	amount.	In	June	2012,	the	plaintiffs'	damages	expert	asserted	that	the	value	of	a	McAfee	share	for	the	purposes	of	assessing	damages should	be	$62.08.

In	January	2012,	the	court	certified	the	action	as	a	class	action,	appointed	the	Central	Pension	Laborers'	Fund	to	act	as	the	class	representative,	and scheduled	trial	to	begin	in	January	2013.	In	March	2012,	defendants	filed	a	petition	with	the	California	Court	of	Appeal	for	a	writ	of	mandate	to	reverse	the class	certification	order;	the	petition	was	denied	in	June	2012.	In	March	2012,	at	defendants'	request,	the	court	held	that	plaintiffs	were	not	entitled	to	a jury	trial,	and	ordered	a	bench	trial.	In	April	2012,	plaintiffs	filed	a	petition	with	the	California	Court	of	Appeal	for	a	writ	of	mandate	to	reverse	that	order, which	the	court	of	appeal	denied	in	July	2012.	In	August	2012,	defendants	filed	a	motion	for	summary	judgment.	The	trial	court	granted	that	motion	in November	2012,	and	entered	final	judgment	in	the	case	in	February	2013.	In	April	2013,	plaintiffs	filed	a	notice	of	appeal.	Because	the	resolution	of	the appeal	may	materially	impact	the	scope	and	nature	of	the	proceeding,	we	are	unable	to	make	a	reasonable	estimate	of	the	potential	loss	or	range	of losses,	if	any,	arising	from	this	matter.	We	dispute	the	class-action	claims	and	intend	to	continue	to	defend	the	lawsuit	vigorously.

# X2Y	Attenuators,	LLC	v.	Intel	et	al

In	May	2011,	X2Y	Attenuators,	LLC	(X2Y)	filed	a	patent	infringement	lawsuit	in	the	U.S.	District	Court	for	the	Western	District	of	Pennsylvania	and	a complaint	with	the	U.S.	International	Trade	Commission	(ITC)	pursuant	to	Section	337	of	the	Tariff	Act	of	1930	against	us	and	two	of	our	customers,	Apple and	Hewlett-Packard	Company,	alleging	infringement	of	five	patents.	X2Y	subsequently	added	a	sixth	patent	to	both	actions.	The	district	court	action	is stayed	pending	resolution	of	the	ITC	proceeding.	X2Y	alleges	that	at	least	Intel®	Core™	and	Intel®	Xeon®	processor	families	infringe	the	asserted	patents. X2Y	also	requests	that	the	ITC	issue	permanent	exclusion	and	cease-and-desist	orders	to,	among	other	things,	prohibit	us	from	importing	these microprocessors	and	Apple	and	Hewlett-Packard	Company	products	that	incorporate	these	microprocessors	into	the	United	States.	In	the	district	court action,	X2Y	seeks	unspecified	damages,	including	enhanced	damages	for	alleged	willful	infringement,	and	injunctive	relief.	On	June	13,	2012,	the Administrative	Law	Judge	issued	an	initial	determination	granting	X2Y's	motion	to	partially	terminate	the	ITC	investigation	with	respect	to	three	of	the asserted	patents.	The	Administrative	Law	Judge	held	a	hearing	on	the	remaining	three	patents	in	August	2012	and	issued	an	initial	determination	in December	2012.	In	the	initial	determination,	the	Administrative	Law	Judge	found	that	Intel,	Apple,	and	Hewlett-Packard	Company	have	not	violated Section	337	of	the	Tariff	Act	of	1930	because	they	have	not	infringed	any	of	the	asserted	claims	of	the	three	patents,	and	ruled	that	the	asserted	claims	of two	of	the	patents	were	invalid.	In	December	2012,	the	parties	filed	petitions	for	review	of	the	initial	determination	by	the	ITC.	In	February	2013,	the	ITC determined	to	review	in	part	the	initial	determination.	On	review,	the	ITC	determined	to	reverse	or	vacate	certain	findings,	and	to	terminate	the investigation	with	a	finding	of	no	violation.	In	April	2013,	X2Y	filed	a	Notice	of	Appeal	with	the	United	States	Court	of	Appeals	for	the	Federal	Circuit.	Given the	procedural	posture	and	nature	of	the	cases,	including	the	fact	that	resolution	of	the	appeal	of	the	ITC's	decision	may	materially	impact	the	scope	and nature	of	the	proceeding,	the	fact	that	monetary	damages	are	not	an	available	remedy	in	the	ITC,	and	that	discovery	regarding	X2Y's	claimed	damages has	not	commenced	in	the	stayed	district	court	action,	we	are	unable	to	make	a	reasonable	estimate	of	the	potential	loss	or	range	of	losses,	if	any,	arising from	these	matters.	We	dispute	the	claims	and	intend	to	defend	the	lawsuits	vigorously.

# Note	27:	Operating	Segments	and	Geographic	Information

Our	operating	segments	in	effect	as	of	 December	28,	2013,	include:

•				Intelligent	Systems	Group

•				Wind	River	Software	Group

•				Software	and	Services	Group

•				New	Devices	Group

In	2013,	we	completed	a	reorganization	that	transferred	a	portion	of	our	wired	connectivity	business	formerly	included	within	DCG	to	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.

We	reorganized	our	IMC	businesses	within	the	"other	Intel	architecture"	operating	segments	to	segment	our	focus	on	the	phone	business.	As	part	of	this reorganization,	we	separated	the	feature	and	entry	phone	component	business	into	the	existing	Phone	Group	operating	segment	and	renamed	the remaining	business,	primarily	discrete	modems,	as	the	Multi-Comm	operating	segment.

In	May	2013,	Brian	Krzanich	became	our	CEO	and	a	member	of	Intel's	Board	of	Directors,	succeeding	Paul	S.	Otellini,	who	retired	from	the	Board	and	as CEO.	Since	his	appointment	as	CEO,	Mr.	Krzanich	made	management	organizational	changes	which	did	not	result	in	a	change	to	the	businesses comprising	our	operating	segments	or	to	the	conclusion	that	the	Chief	Operating	Decision	Maker	(CODM)	is	the	CEO.	The	CODM	allocates	resources	to and	assesses	the	performance	of	each	operating	segment	using	information	about	its	revenue	and	operating	income	(loss).

PCCG	and	DCG	are	our	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	a	reportable	operating	segment;	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:

•PC	Client	Group.	Includes	platforms	designed	for	the	notebook	(including	Ultrabook ™	devices	and	2	in	1	systems),	desktop	(including	all-in-ones	and high-end	enthusiast	PCs),	and	certain	tablet	market	segments;	and	wireless	and	wired	connectivity	products.

•Data	Center	Group.	Includes	platforms	designed	for	the	server,	workstation,	and	storage	computing	market	segments;	and	wired	network	connectivity products.

•Other	Intel	architecture	operating	segments.	Includes	platforms	designed	for	embedded	applications	for	communications,	medical,	automotive, industrial,	retail,	and	other	market	segments;	mobile	components	such	as	baseband	processors,	radio	frequency	transceivers,	WiFi,	Bluetooth®,	global navigation	satellite	system,	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;	delivering	reference	devices	and technology	platforms	ready	to	be	used	by	customers	as	well	as	System-on-Chip	architecture	specifically	designed	for	wearable	and	other	emerging compute	opportunities.

•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.

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:

•results	of	operations	from	our	Non-Volatile	Memory	Solutions	Group	that	includes	NAND	flash	memory	products	for	use	in	a	variety	of	devices;

•amounts	included	within	restructuring	and	asset	impairment	charges;

•a	portion	of	profit-dependent	compensation	and	other	expenses	not	allocated	to	the	operating	segments;

•divested	businesses	for	which	discrete	operating	results	are	not	reviewed	by	our	CODM;

•results	of	operations	of	start-up	businesses	that	support	our	initiatives,	including	our	foundry	business;	and

•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.	Based	on	the	interchangeable	nature	of	our	manufacturing	and assembly	and	test	assets,	most	of	the	related	depreciation	expense	is	not	directly	identifiable	within	our	operating	segments	as	it	is	included	in	overhead cost	pools	and	subsequently	absorbed	into	inventory	as	each	product	passes	through	our	manufacturing	process.	As	our	products	are	then	sold	across multiple	operating	segments,	it	is	impracticable	to	determine	the	total	depreciation	expense	included	as	a	component	of	each	operating	segment's operating	income	(loss)	results.	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.

	Net	revenue	and	operating	income	(loss)	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Net\trevenue: |  |  |  |
| PC\tClient\tGroup | $33,039 | $34,504 | $35,624 |
| Data\tCenter\tGroup | 11,238 | 10,511 | 9,911 |
| Other\tIntel\tarchitecture\toperating\tsegments | 4,092 | 4,378 | 5,005 |
| Software\tand\tservices\toperating\tsegments | 2,502 | 2,381 | 1,870 |
| All\tother | 1,837 | 1,567 | 1,589 |
| Total\tnet\trevenue | $52,708 | $53,341 | $53,999 |
| Operating\tincome\t(loss): |  |  |  |
| PC\tClient\tGroup | $11,827 | $13,106 | $14,840 |
| Data\tCenter\tGroup | 5,164 | 5,020 | 5,053 |
| Other\tIntel\tarchitecture\toperating\tsegments | (2,445) | (1,377) | (577) |
| Software\tand\tservices\toperating\tsegments | 1 | (11) | (32) |
| All\tother | (2,256) | (2,100) | (1,807) |
| Total\toperating\tincome | $12,291 | $14,638 | $17,477 |

In	2013,	Hewlett-Packard	Company	accounted	for	17%	of	our	net	revenue	(18%	in	2012	and	19%	in	2011),	Dell	Inc.	accounted	for	15%	of	our	net revenue	(14%	in	2012	and	15%	in	2011),	and	Lenovo	Group	Limited	accounted	for	12%	of	our	net	revenue	(11%	in	2012	and	9%	in	2011).	The	majority of	the	revenue	from	these	customers	was	from	the	sale	of	platforms	and	other	components	by	the	PCCG	and	the	DCG	operating	segments.

Most	of	our	revenue	in	the	PCCG	and	DCG	operating	segments	is	generated	from	the	sale	of	platforms.

Net	revenue	by	country	for	the	three	years	ended	 December	28,	2013,	is	based	on	the	billing	location	of	the	customer.	Certain	prior-period	amounts	have been	reclassified	to	conform	to	the	current	year's	presentation.	Revenue	from	unaffiliated	customers	for	each	period	were	as	follows:

| (In	Millions) | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| Singapore | $10,997 | $12,622 | $13,626 |
| China\t(including\tHong\tKong) | 9,890 | 8,299 | 7,133 |
| United\tStates | 9,091 | 8,348 | 9,005 |
| Taiwan | 8,888 | 9,327 | 8,534 |
| Japan | 3,725 | 4,303 | 4,538 |
| Other\tcountries | 10,117 | 10,442 | 11,163 |
| Total\tnet\trevenue | $52,708 | $53,341 | $53,999 |

Net	property,	plant	and	equipment	by	country	at	the	end	of	each	period	was	as	follows:

| (In	Millions) | Dec	28,<br>2013 | Dec	29,<br>2012 | Dec	31,<br>2011 |
| :--- | :--- | :--- | :--- |
| United\tStates | $23,624 | $20,542 | $16,448 |
| Ireland | 2,986 | 1,523 | 1,198 |
| Israel | 2,667 | 3,389 | 3,356 |
| Other\tcountries | 2,151 | 2,529 | 2,625 |
| Total\tproperty,\tplant\tand\tequipment,\tnet | $31,428 | $27,983 | $23,627 |

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

# The	Board	of	Directors	and	Stockholders	of	Intel	Corporation

We	have	audited	the	accompanying	consolidated	balance	sheets	of	Intel	Corporation	as	of	 December	28,	2013	and	December	29,	2012,	and	the	related consolidated	statements	of	income	and	comprehensive	income,	stockholders'	equity,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended December	28,	2013.	Our	audits	also	included	the	financial	statement	schedule	listed	in	the	Index	at	Part	IV,	Item	15.	These	financial	statements	and schedule	are	the	responsibility	of	the	company's	management.	Our	responsibility	is	to	express	an	opinion	on	these	financial	statements	and	schedule based	on	our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require that	we	plan	and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit includes	examining,	on	a	test	basis,	evidence	supporting	the	amounts	and	disclosures	in	the	financial	statements.	An	audit	also	includes	assessing	the accounting	principles	used	and	significant	estimates	made	by	management,	as	well	as	evaluating	the	overall	financial	statement	presentation.	We	believe that	our	audits	provide	a	reasonable	basis	for	our	opinion.

In	our	opinion,	the	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	consolidated	financial	position	of	Intel	Corporation	at December	28,	2013	and	December	29,	2012,	and	the	consolidated	results	of	its	operations	and	its	cash	flows	for	each	of	the	three	years	in	the	period ended	December	28,	2013,	in	conformity	with	U.S.	generally	accepted	accounting	principles.	Also,	in	our	opinion,	the	related	financial	statement	schedule, when	considered	in	relation	to	the	basic	financial	statements	taken	as	a	whole,	presents	fairly	in	all	material	respects	the	information	set	forth	therein.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	Intel	Corporation's	internal control	over	financial	reporting	as	of	December	28,	2013,	based	on	criteria	established	in	Internal	Control—Integrated	Framework	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(1992	Framework)	and	our	report	dated	February	14,	2014	expressed	an unqualified	opinion	thereon.

San	Jose,	California

We	have	audited	Intel	Corporation's	internal	control	over	financial	reporting	as	of	 December	28,	2013,	based	on	criteria	established	in	Internal	Control— Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(1992	Framework)	(the	COSO	criteria).	Intel Corporation's	management	is	responsible	for	maintaining	effective	internal	control	over	financial	reporting,	and	for	its	assessment	of	the	effectiveness	of internal	control	over	financial	reporting	included	in	the	accompanying	Management	Report	on	Internal	Control	Over	Financial	Reporting.	Our	responsibility is	to	express	an	opinion	on	the	company's	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require that	we	plan	and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all material	respects.	Our	audit	included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness exists,	testing	and	evaluating	the	design	and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk,	and	performing	such	other	procedures as	we	considered	necessary	in	the	circumstances.	We	believe	that	our	audit	provides	a	reasonable	basis	for	our	opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting and	the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal control	over	financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as necessary	to	permit	preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of the	company	are	being	made	only	in	accordance	with	authorizations	of	management	and	directors	of	the	company;	and	(3)	provide	reasonable	assurance regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of compliance	with	the	policies	or	procedures	may	deteriorate.

In	our	opinion,	Intel	Corporation	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of December	28,	2013,	based	on the	COSO	criteria.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the 2013	consolidated financial	statements	of	Intel	Corporation	and	our	report	dated	February	14,	2014	expressed	an	unqualified	opinion	thereon.

# FINANCIAL	INFORMATION	BY	QUARTER	(UNAUDITED)

| (In	Millions,	Except	Per	Share	Amounts) | December	28 | September	28 | June	29 | March	30 |
| :--- | :--- | :--- | :--- | :--- |
| Net\trevenue | $13,834 | $13,483 | $12,811 | $12,580 |
| Gross\tmargin | $8,571 | $8,414 | $7,470 | $7,066 |
| Net\tincome | $2,625 | $2,950 | $2,000 | $2,045 |
| Basic\tearnings\tper\tcommon\tshare | $0.53 | $0.59 | $0.40 | $0.41 |
| Diluted\tearnings\tper\tcommon\tshare | $0.51 | $0.58 | $0.39 | $0.40 |
| Dividends\tper\tcommon\tshare: |  |  |  |  |
| Declared | $— | $0.4500 | $— | $0.4500 |
| Paid | $0.2250 | $0.2250 | $0.2250 | $0.2250 |
| Market\tprice\trange\tcommon\tstock1: |  |  |  |  |
| High | $25.70 | $24.25 | $25.47 | $22.68 |
| Low | $22.48 | $21.92 | $20.94 | $20.23 |

| (In	Millions,	Except	Per	Share	Amounts) | December	29 | September	29 | June	30 | March	31 |
| :--- | :--- | :--- | :--- | :--- |
| Net\trevenue | $13,477 | $13,457 | $13,501 | $12,906 |
| Gross\tmargin | $7,817 | $8,515 | $8,554 | $8,265 |
| Net\tincome | $2,468 | $2,972 | $2,827 | $2,738 |
| Basic\tearnings\tper\tcommon\tshare | $0.50 | $0.59 | $0.56 | $0.55 |
| Diluted\tearnings\tper\tcommon\tshare | $0.48 | $0.58 | $0.54 | $0.53 |
| Dividends\tper\tcommon\tshare: |  |  |  |  |
| Declared | $— | $0.4500 | $— | $0.4200 |
| Paid | $0.2250 | $0.2250 | $0.2100 | $0.2100 |
| Market\tprice\trange\tcommon\tstock1: |  |  |  |  |
| High | $22.84 | $26.88 | $29.18 | $28.19 |
| Low | $19.36 | $22.54 | $25.04 | $24.54 |

1 Intel's	common	stock	(symbol	INTC)	trades	on	The	NASDAQ	Global	Select	Market*.	All	stock	prices	are	closing	prices	per	The	NASDAQ	Global Select	Market*.

# ITEM	9. CHANGES	IN	AND	DISAGREEMENTS	WITH	ACCOUNTANTS	ON	ACCOUNTING	AND	FINANCIAL	DISCLOSURE

# ITEM	9A. CONTROLS	AND	PROCEDURES

# Evaluation	of	Disclosure	Controls	and	Procedures

Based	on	management's	evaluation	(with	the	participation	of	our	CEO	and	Chief	Financial	Officer	(CFO)),	as	of	the	end	of	the	period	covered	by	this report,	our	CEO	and	CFO	have	concluded	that	our	disclosure	controls	and	procedures	(as	defined	in	Rules	13a-15(e)	and	15d-15(e)	under	the	Securities Exchange	Act	of	1934,	as	amended	(the	Exchange	Act)),	are	effective	to	provide	reasonable	assurance	that	information	required	to	be	disclosed	by	us	in reports	that	we	file	or	submit	under	the	Exchange	Act	is	recorded,	processed,	summarized,	and	reported	within	the	time	periods	specified	in	U.S. Securities	and	Exchange	Commission	(SEC)	rules	and	forms,	and	is	accumulated	and	communicated	to	management,	including	our	principal	executive officer	and	principal	financial	officer,	as	appropriate,	to	allow	timely	decisions	regarding	required	disclosure.

# Changes	in	Internal	Control	Over	Financial	Reporting

There	were	no	changes	to	our	internal	control	over	financial	reporting	(as	defined	in	Rules	13a-15(f)	and	15d-15(f)	under	the	Exchange	Act)	that	occurred during	the	quarter	ended	December	28,	2013,	that	have	materially	affected,	or	are	reasonably	likely	to	materially	affect,	our	internal	control	over	financial reporting.

# Management	Report	on	Internal	Control	Over	Financial	Reporting

Our	management	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting	(as	defined	in	Rules	13a-15(f)	and	15d- 15(f)	under	the	Exchange	Act)	to	provide	reasonable	assurance	regarding	the	reliability	of	our	financial	reporting	and	the	preparation	of	consolidated financial	statements	for	external	purposes	in	accordance	with	U.S.	generally	accepted	accounting	principles.

Management	assessed	our	internal	control	over	financial	reporting	as	of	 December	28,	2013,	the	end	of	our	fiscal	year.	Management	based	its assessment	on	criteria	established	in	Internal	Control—Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway Commission	(1992	framework).	Management's	assessment	included	evaluation	of	elements	such	as	the	design	and	operating	effectiveness	of	key financial	reporting	controls,	process	documentation,	accounting	policies,	and	our	overall	control	environment.

Based	on	this	assessment,	management	has	concluded	that	our	internal	control	over	financial	reporting	was	effective	as	of	the	end	of	the	fiscal	year	to provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	consolidated	financial	statements	for	external	reporting purposes	in	accordance	with	U.S.	generally	accepted	accounting	principles.	We	reviewed	the	results	of	management's	assessment	with	the	Audit Committee	of	our	Board	of	Directors.

Our	independent	registered	public	accounting	firm,	Ernst	&	Young	LLP,	independently	assessed	the	effectiveness	of	the	company's	internal	control	over financial	reporting,	as	stated	in	the	firm's	attestation	report,	which	is	included	at	the	end	of	Part	II,	Item	8	of	this	Form	10-K.

# Inherent	Limitations	on	Effectiveness	of	Controls

Our	management,	including	the	CEO	and	CFO,	does	not	expect	that	our	disclosure	controls	or	our	internal	control	over	financial	reporting	will	prevent	or detect	all	errors	and	all	fraud.	A	control	system,	no	matter	how	well	designed	and	operated,	can	provide	only	reasonable,	not	absolute,	assurance	that	the control	system's	objectives	will	be	met.	The	design	of	a	control	system	must	reflect	the	fact	that	there	are	resource	constraints,	and	the	benefits	of	controls must	be	considered	relative	to	their	costs.	Further,	because	of	the	inherent	limitations	in	all	control	systems,	no	evaluation	of	controls	can	provide	absolute assurance	that	misstatements	due	to	error	or	fraud	will	not	occur	or	that	all	control	issues	and	instances	of	fraud,	if	any,	have	been	detected.	The	design	of any	system	of	controls	is	based	in	part	on	certain	assumptions	about	the	likelihood	of	future	events,	and	there	can	be	no	assurance	that	any	design	will succeed	in	achieving	its	stated	goals	under	all	potential	future	conditions.	Projections	of	any	evaluation	of	the	effectiveness	of	controls	to	future	periods are	subject	to	risks.	Over	time,	controls	may	become	inadequate	because	of	changes	in	conditions	or	deterioration	in	the	degree	of	compliance	with policies	or	procedures.

ITEM	9B. OTHER	INFORMATION

None.

# PART	III

# ITEM	10. DIRECTORS,	EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

The	information	in	our	2014	Proxy	Statement	regarding	directors	and	executive	officers	appearing	under	the	headings	"Proposal	1:	Election	of	Directors" and	"Other	Matters—Section	16(a)	Beneficial	Ownership	Reporting	Compliance"	is	incorporated	by	reference	in	this	section.	The	information	under	the heading	"Executive	Officers	of	the	Registrant"	in	Part	I,	Item	1	of	this	Form	10-K	is	also	incorporated	by	reference	in	this	section.	In	addition,	the information	under	the	heading	"Corporate	Governance"	in	our	2014	Proxy	Statement	is	incorporated	by	reference	in	this	section.

The	Intel	Code	of	Conduct	(the	Code)	is	our	code	of	ethics	document	applicable	to	all	employees,	including	all	officers,	and	including	our	independent directors,	who	are	not	employees	of	the	company,	with	regard	to	their	Intel-related	activities.	The	Code	incorporates	our	guidelines	designed	to	deter wrongdoing	and	to	promote	honest	and	ethical	conduct	and	compliance	with	applicable	laws	and	regulations.	The	Code	also	incorporates	our	expectations of	our	employees	that	enable	us	to	provide	accurate	and	timely	disclosure	in	our	filings	with	the	SEC	and	other	public	communications.	In	addition,	the Code	incorporates	guidelines	pertaining	to	topics	such	as	complying	with	applicable	laws,	rules,	and	regulations;	reporting	Code	violations;	and maintaining	accountability	for	adherence	to	the	Code.

The	full	text	of	our	Code	is	published	on	our	Investor	Relations	web	site	at	 www.intc.com.	We	intend	to	disclose	future	amendments	to	certain	provisions of	our	Code,	or	waivers	of	such	provisions	granted	to	executive	officers	and	directors,	on	the	web	site	within	four	business	days	following	the	date	of	such amendment	or	waiver.

# ITEM	11. EXECUTIVE	COMPENSATION

The	information	appearing	in	our	2014	Proxy	Statement	under	the	headings	"Director	Compensation,"	"Compensation	Discussion	and	Analysis,"	"Report of	the	Compensation	Committee,"	and	"Executive	Compensation"	is	incorporated	by	reference	in	this	section.

# ITEM	12. SECURITY	OWNERSHIP	OF	CERTAIN	BENEFICIAL	OWNERS	AND	MANAGEMENT	AND	RELATED	STOCKHOLDER	MATTERS

The	information	appearing	in	our	2014	Proxy	Statement	under	the	heading	"Security	Ownership	of	Certain	Beneficial	Owners	and	Management"	is incorporated	by	reference	in	this	section.

# Equity	Compensation	Plan	Information

Information	as	of	December	28,	2013,	regarding	equity	compensation	plans	approved	and	not	approved	by	stockholders	is	summarized	in	the	following table	(shares	in	millions):

| Plan	Category | (A)<br>Number	of	Shares	to<br>Be	Issued	Upon	Exercise<br>of	Outstanding	Options<br>and	Rights |  | (B)<br>Weighted	Average<br>Exercise	Price	of<br>Outstanding<br>Options	($)¹ | Number	of	Shares	Remaining<br>Available	for	Future	Issuance<br>Under	Equity	Incentive	Plans<br>(Excluding	Shares	Reflected	in<br>Column	A) |
| :--- | :--- | :--- | :--- | :--- |
| 2006\tEquity\tIncentive\tPlan |  |  |  | 301.0 |
| 2006\tStock\tPurchase\tPlan |  |  |  | 216.5 |
| Equity\tincentive\tplans\tapproved\tby\tstockholders | 257.9 | 2 | $20.86 | 517.5 |
| Equity\tincentive\tplans\tnot\tapproved\tby\tstockholders | 11.8 | 4 | $24.02 | — |
| Total | 269.7 | 5 | $21.10 | 517.5 |

1	 The	weighted	average	exercise	price	does	not	take	into	account	the	shares	issuable	upon	outstanding	RSUs	vesting,	which	have	no	exercise	price.

2 Includes	116.7	million	shares	granted	under	the	2006	Equity	Incentive	Plan	that	are	issuable	upon	RSUs	vesting,	including	a	maximum	of 6.9	million shares	that	could	be	issued	at	the	end	of	the	requisite	period	for	outstanding	OSUs.	The	remaining	balance	consists	of	outstanding	stock	option grants.

3 If	it	is	assumed	that	shares	will	be	issued	at	the	target	vesting	amount	for	outstanding	OSUs,	an	additional	 3.4	million	shares	would	be	included	in the	shares	available	for	future	issuance	amount	for	a	total	of	304.4	million	shares,	of	which	231.2	million	shares	can	be	issued	as	RSUs	or	restricted stock.	A	maximum	of	517	million	shares	could	be	granted	as	restricted	stock	or	RSUs	under	the	2006	Equity	Incentive	Plan.

4 Includes	shares	available	upon	exercise	of	stock	options	granted	under	our	1997	Stock	Option	Plan,	which	was	not	required	to	be	approved	by stockholders.	The	1997	Stock	Option	Plan	was	terminated	as	to	future	grants	in	May	2004.	In	addition,	this	includes	3.1	million	shares	issuable under	outstanding	options,	with	a	weighted	average	exercise	price	of	$15.65,	assumed	in	connection	with	acquisitions.

5	 Assumes	shares	will	be	issued	at	the	maximum	vesting	amount	for	outstanding	OSUs.	This	number	reflects	a	difference	from	the	number	of restricted	stock	units	reported	in	"Note	19:	Employee	Equity	Incentive	Plans"	to	the	financial	statements	in	our	Annual	Report	on	Form	10-K	for	the year	ended	December	28,	2013,	which	is	3.4	million	lower	because	the	financial	statement	footnote	reports	restricted	stock	units	outstanding without	regard	to	the	number	of	shares	that	ultimately	may	be	issued	under	those	awards.

The	1997	Stock	Option	Plan	(1997	Plan)	provided	for	the	grant	of	stock	options	to	employees	other	than	officers	and	directors.	The	1997	Plan,	which	was not	approved	by	stockholders,	was	terminated	as	to	future	grants	in	May	2004.	The	1997	Plan	is	administered	by	the	Board's	Compensation	Committee, which	has	the	power	to	determine	matters	related	to	outstanding	stock	option	awards	under	the	1997	Plan,	including	conditions	of	vesting	and	exercise. Stock	options	granted	under	the	1997	Plan	expire	no	later	than	10	years	from	the	grant	date.	Stock	options	granted	under	the	1997	Plan	generally	vested in	increments	over	four	or	five	years	from	the	date	of	grant.	Grants	to	key	employees	may	have	contained	delayed	vesting	provisions,	generally	beginning six	years	from	the	date	of	grant.

# ITEM	13. CERTAIN	RELATIONSHIPS	AND	RELATED	TRANSACTIONS,	AND	DIRECTOR	INDEPENDENCE

The	information	appearing	in	our	2014	Proxy	Statement	under	the	headings	"Corporate	Governance"	and	"Certain	Relationships	and	Related Transactions"	is	incorporated	by	reference	in	this	section.

# ITEM	14. PRINCIPAL	ACCOUNTING	FEES	AND	SERVICES

The	information	appearing	in	our	2014	Proxy	Statement	under	the	headings	"Report	of	the	Audit	Committee"	and	"Proposal	2:	Ratification	of	Selection	of Independent	Registered	Public	Accounting	Firm"	is	incorporated	by	reference	in	this	section.

# PART	IV

# ITEM	15. EXHIBITS,	FINANCIAL	STATEMENT	SCHEDULES

1. Financial	Statements:	See	"Index	to	Consolidated	Financial	Statements"	in	Part	II,	Item	8	of	this	Form	10-K.

2. Financial	Statement	Schedule:	See	"Schedule	II—Valuation	and	Qualifying	Accounts"	in	this	section	of	this	Form	10-K.

3. Exhibits:	The	exhibits	listed	in	the	accompanying	index	to	exhibits	are	filed,	furnished,	or	incorporated	by	reference	as	part	of	this	Form	10-K.

Certain	of	the	agreements	filed	as	exhibits	to	this	Form	10-K	contain	representations	and	warranties	by	the	parties	to	the	agreements	that	have	been made	solely	for	the	benefit	of	the	parties	to	the	agreement.	These	representations	and	warranties:

•may	have	been	qualified	by	disclosures	that	were	made	to	the	other	parties	in	connection	with	the	negotiation	of	the	agreements,	which	disclosures are	not	necessarily	reflected	in	the	agreements;

•may	apply	standards	of	materiality	that	differ	from	those	of	a	reasonable	investor;	and

•were	made	only	as	of	specified	dates	contained	in	the	agreements	and	are	subject	to	subsequent	developments	and	changed	circumstances.

Accordingly,	these	representations	and	warranties	may	not	describe	the	actual	state	of	affairs	as	of	the	date	that	these	representations	and	warranties were	made	or	at	any	other	time.	Investors	should	not	rely	on	them	as	statements	of	fact.

Intel,	the	Intel	logo,	Intel	Core,	Intel	Atom,	Intel	Inside,	the	Intel	Inside	logo,	Iris,	Intel	vPro,	Intel	Xeon,	Intel	Xeon	Phi,	Itanium,	Pentium,	and	Ultrabook	are trademarks	of	Intel	Corporation	in	the	U.S.	and/or	other	countries.

*	Other	names	and	brands	may	be	claimed	as	the	property	of	others.

The	Bluetooth®	word	mark	is	a	registered	trademark	owned	by	Bluetooth	SIG,	Inc.	and	any	use	of	such	marks	by	Intel	Corporation	is	under	license.

# SCHEDULE	II—VALUATION	AND	QUALIFYING	ACCOUNTS

| Three	Years	Ended	December	28,	2013<br>(In	Millions) | Balance	at	Beginning<br>of	Year | Additions	Charged<br>to	Expenses/<br>Other	Accounts | Net<br>(Deductions)<br>Recoveries | Balance	at<br>End	of	Year |
| :--- | :--- | :--- | :--- | :--- |
| Allowance\tfor\tdoubtful\treceivables |  |  |  |  |
| 2013 | $38 | $5 | $(5) | $38 |
| 2012 | $36 | $3 | $(1) | $38 |
| 2011 | $28 | $8 | $— | $36 |
| Valuation\tallowance\tfor\tdeferred\ttax\tassets |  |  |  |  |
| 2013 | $389 | $88 | $(21) | $456 |
| 2012 | $373 | $77 | $(61) | $389 |
| 2011 | $252 | $121 | $— | $373 |

Deductions	in	allowance	for	doubtful	receivables	represent	uncollectible	accounts	written	off,	net	of	recoveries.

| Number | Exhibit	Description | Form | File	Number | Exhibit | Date |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 3.1 | Intel\tCorporation\tThird\tRestated\tCertificate\tof\tIncorporation\tof | 8-K | 000-06217 | 3.1 | 5/22/2006 |
|  | Intel\tCorporation\tdated\tMay\t17,\t2006 |  |  |  |  |
| 3.2 | Intel\tCorporation\tBylaws,\tas\tamended\tand\trestated\ton\tJuly\t26, | 8-K | 000-06217 | 3.1 | 7/27/2011 |
|  | 2011 |  |  |  |  |
| 4.2.1 | Indenture\tfor\tthe\tRegistrant's\t2.95%\tJunior\tSubordinated | 10-K | 000-06217 | 4.2 | 2/27/2006 |
|  | Convertible\tDebentures\tdue\t2035\tbetween\tIntel\tCorporation\tand |  |  |  |  |
|  | Wells\tFargo\tBank,\tNational\tAssociation\t(as\tsuccessor\tto\tCitibank |  |  |  |  |
|  | N.A.),\tdated\tas\tof\tDecember\t16,\t2005\t(the\t"Convertible\tNote |  |  |  |  |
|  | Indenture") |  |  |  |  |
| 4.2.2 | Indenture\tdated\tas\tof\tMarch\t29,\t2006\tbetween\tIntel\tCorporation | S-3ASR | 333-132865 | 4.4 | 3/30/2006 |
|  | and\tWells\tFargo\tBank,\tNational\tAssociation\t(as\tsuccessor\tto |  |  |  |  |
|  | Citibank\tN.A.)\t(the\t"Open-Ended\tIndenture") |  |  |  |  |
| 4.2.3 | First\tSupplemental\tIndenture\tto\tConvertible\tNote\tIndenture,\tdated | 10-K | 000-06217 | 4.2.3 | 2/20/2008 |
|  | as\tof\tJuly\t25,\t2007 |  |  |  |  |
| 4.2.4 | First\tSupplemental\tIndenture\tto\tOpen-Ended\tIndenture,\tdated\tas | 10-K | 000-06217 | 4.2.4 | 2/20/2008 |
|  | of\tDecember\t3,\t2007 |  |  |  |  |
| 4.2.5 | Indenture\tfor\tthe\tRegistrant's\t3.25%\tJunior\tSubordinated | 10-Q | 000-06217 | 4.1 | 11/2/2009 |
|  | Convertible\tDebentures\tdue\t2039\tbetween\tIntel\tCorporation\tand |  |  |  |  |
|  | Wells\tFargo\tBank,\tNational\tAssociation,\tdated\tas\tof\tJuly\t27,\t2009 |  |  |  |  |
| 4.2.6 | Second\tSupplemental\tIndenture\tto\tOpen-Ended\tIndenture\tfor\tthe | 8-K | 000-06217 | 4.01 | 9/19/2011 |
|  | Registrant's\t1.95%\tSenior\tNotes\tdue\t2016,\t3.30%\tSenior\tNotes |  |  |  |  |
|  | September\t19,\t2011 |  |  |  |  |
| 4.2.7 | Third\tSupplemental\tIndenture\tto\tOpen-Ended\tIndenture\tfor\tthe | 8-K | 000-06217 | 4.01 | 12/11/2012 |
|  | Registrant's\t1.35%\tSenior\tNotes\tdue\t2017,\t2.70%\tSenior\tNotes |  |  |  |  |
|  | due\t2042,\tdated\tas\tof\tDecember\t11,\t2012 |  |  |  |  |
| 4.2.8 | Fourth\tSupplemental\tIndenture\tto\tOpen-Ended\tIndenture\tfor\tthe | 8-K | 000-06217 | 4.01 | 12/14/2012 |
|  | Registrant's\t4.25%\tSenior\tNotes\tdue\t2042,\tdated\tas\tof\tDecember |  |  |  |  |
|  | 14,\t2012 |  |  |  |  |
| 10.1** | Intel\tCorporation\t1984\tStock\tOption\tPlan,\tas\tamended\tand | 10-Q | 333-45395 | 10.1 | 8/11/1998 |
|  | restated\teffective\tJuly\t16,\t1997 |  |  |  |  |
| 10.1.2 | Intel\tCorporation\t1997\tStock\tOption\tPlan,\tas\tamended\tand | 10-K | 000-06217 | 10.7 | 3/11/2003 |
|  | restated\teffective\tJuly\t16,\t1997 |  |  |  |  |
| 10.2** | Intel\tCorporation\t2004\tEquity\tIncentive\tPlan,\teffective\tMay\t19, | 10-Q | 000-06217 | 10.3 | 8/2/2004 |
|  | 2004 |  |  |  |  |
| 10.2.1** | Form\tof\tNotice\tof\tGrant\tof\tNon-Qualified\tStock\tOption\tunder\tthe | 10-Q | 000-06217 | 10.7 | 8/2/2004 |
|  | Intel\tCorporation\t2004\tEquity\tIncentive\tPlan |  |  |  |  |
| 10.2.2** | Standard\tTerms\tand\tConditions\tRelating\tto\tNon-Qualified\tStock | 10-Q | 000-06217 | 10.5 | 8/2/2004 |
|  | under\tthe\tIntel\tCorporation\t2004\tEquity\tIncentive\tPlan |  |  |  |  |
| 10.2.3** | Standard\tInternational\tNon-Qualified\tStock\tOption\tAgreement | 10-Q | 000-06217 | 10.6 | 8/2/2004 |
|  | under\tthe\tIntel\tCorporation\t2004\tEquity\tIncentive\tPlan |  |  |  |  |
| 10.2.4** | Intel\tCorporation\tNon-Employee\tDirector\tNon-Qualified\tStock | 10-Q | 000-06217 | 10.4 | 8/2/2004 |
|  | Option\tAgreement\tunder\tthe\tIntel\tCorporation\t2004\tEquity |  |  |  |  |
|  | Incentive\tPlan |  |  |  |  |
| 10.2.5** | Form\tof\tELTSOP\tNon-Qualified\tStock\tOption\tAgreement\tunder | 8-K | 000-06217 | 10.1 | 10/12/2004 |
|  | the\tIntel\tCorporation\t2004\tEquity\tIncentive\tPlan |  |  |  |  |
| 10.2.6** | Intel\tCorporation\t2004\tEquity\tIncentive\tPlan,\tas\tamended\tand | 8-K | 000-06217 | 10.1 | 5/20/2005 |
|  | restated,\teffective\tMay\t18,\t2005 |  |  |  |  |
| 10.2.7** | Form\tof\tNotice\tof\tGrant\tof\tRestricted\tStock\tUnits | 8-K | 000-06217 | 10.5 | 2/9/2006 |

| Number | Exhibit	Description | Form | File	Number | Exhibit | Date |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 10.2.8** | Intel\tCorporation\tNonqualified\tStock\tOption\tAgreement\tunder\tthe | 10-K | 000-06217 | 10.16 | 2/27/2006 |
|  | 2004\tEquity\tIncentive\tPlan |  |  |  |  |
| 10.2.9** | Intel\tCorporation\t2004\tEquity\tIncentive\tPlan\tStandard\tTerms\tand | 10-Q | 000-06217 | 10.6 | 5/8/2006 |
|  | Conditions\trelating\tto\tNon-Qualified\tStock\tOptions\tgranted\ton\tand |  |  |  |  |
|  | after\tFebruary\t1,\t2006\tunder\tthe\tIntel\tCorporation\t2004\tEquity |  |  |  |  |
|  | Incentive\tPlan\t(other\tthan\tgrants\tmade\tunder\tthe\tSOP\tPlus\tor |  |  |  |  |
|  | ELTSOP\tprograms) |  |  |  |  |
| 10.2.10** | Intel\tCorporation\t2004\tEquity\tIncentive\tPlan\tTerms\tand | 10-Q | 000-06217 | 10.13 | 5/8/2006 |
|  | Conditions\trelating\tto\tNonqualified\tStock\tOptions\tgranted\ton\tand |  |  |  |  |
|  | after\tFebruary\t1,\t2006\tunder\tthe\tIntel\tCorporation\t2004\tEquity |  |  |  |  |
|  | Incentive\tPlan\tfor\tgrants\tformerly\tknown\tas\tELTSOP\tGrants |  |  |  |  |
| 10.2.11** | Intel\tCorporation\tInternational\tNonqualified\tStock\tOption | 10-Q | 000-06217 | 10.15 | 5/8/2006 |
|  | Agreement\tunder\tthe\t2004\tEquity\tIncentive\tPlan\t(for\tgrants\tafter |  |  |  |  |
|  | February\t1,\t2006\tunder\tthe\tELTSOP\tProgram) |  |  |  |  |
| 10.3** | Amendment\tto\tall\tGrant\tAgreements\tof\tRestricted\tStock\tUnits\tand | 10-Q | 000-06217 | 10.5 | 5/2/2008 |
|  | Stock\tOptions\tgranted\tunder\tthe\tIntel\tCorporation\t2006\tEquity |  |  |  |  |
|  | Incentive\tPlan,\tIntel\tCorporation\t2004\tEquity\tIncentive\tPlan\tand |  |  |  |  |
|  | 1997\tStock\tOption\tPlan\tand\tare\toutstanding\tas\tof\tJanuary\t15, |  |  |  |  |
|  | 2008 |  |  |  |  |
| 10.4** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | 8-K | 000-06217 | 10.1 | 5/22/2006 |
|  | restated,\teffective\tMay\t17,\t2006 |  |  |  |  |
| 10.4.1** | Intel\tCorporation\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\t2006 | 8-K | 000-06217 | 10.2 | 7/6/2006 |
|  | Equity\tIncentive\tPlan\t(for\tRSUs\tgranted\tafter\tApril\t1,\t2006\tand |  |  |  |  |
|  | before\tMay\t18,\t2006\tunder\tthe\tstandard\tRSU\tprogram) |  |  |  |  |
| 10.4.2** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tTerms\tand | 8-K | 000-06217 | 10.7 | 7/6/2006 |
|  | Conditions\trelating\tto\tRestricted\tStock\tUnits\tgranted\ton\tand\tafter |  |  |  |  |
|  | May\t17,\t2006\tand\tbefore\tJanuary\t19,\t2008\tunder\tthe\tIntel |  |  |  |  |
|  | Corporation\t2006\tEquity\tIncentive\tPlan\t(for\tRSUs\tgranted\tunder |  |  |  |  |
|  | the\tELTSOP\tRSU\tProgram) |  |  |  |  |
| 10.4.3** | Intel\tCorporation\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\t2006 | 8-K | 000-06217 | 10.8 | 7/6/2006 |
|  | Equity\tIncentive\tPlan\t(for\tRSUs\tgranted\tafter\tMay\t17,\t2006\tand |  |  |  |  |
|  | before\tJanuary\t19,\t2008\tunder\tthe\tELTSOP\tprogram) |  |  |  |  |
| 10.4.4** | Form\tof\tNotice\tof\tGrant—Restricted\tStock\tUnits | 8-K | 000-06217 | 10.13 | 7/6/2006 |
| 10.4.5** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tStandard\tTerms\tand | 8-K | 000-06217 | 10.14 | 7/6/2006 |
|  | Conditions\trelating\tto\tNon-Qualified\tStock\tOptions\tgranted\ton\tand |  |  |  |  |
|  | after\tMay\t17,\t2006\tand\tbefore\tJanuary\t19,\t2008\tunder\tthe\tIntel |  |  |  |  |
|  | Corporation\t2006\tEquity\tIncentive\tPlan\t(standard\toption\tprogram) |  |  |  |  |
| 10.4.6** | Intel\tCorporation\tNonqualified\tStock\tOption\tAgreement\tunder\tthe | 8-K | 000-06217 | 10.15 | 7/6/2006 |
|  | 2006\tEquity\tIncentive\tPlan\t(for\toptions\tgranted\tafter\tMay\t17, |  |  |  |  |
|  | 2006\tand\tbefore\tJanuary\t19,\t2008\tunder\tthe\tstandard\tprogram) |  |  |  |  |
| 10.4.7** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tTerms\tand | 8-K | 000-06217 | 10.19 | 7/6/2006 |
|  | Conditions\trelating\tto\tNonqualified\tStock\tOptions\tgranted\ton\tand |  |  |  |  |
|  | after\tMay\t17,\t2006\tand\tbefore\tJanuary\t19,\t2008\tunder\tthe\tIntel |  |  |  |  |
|  | Corporation\t2006\tEquity\tIncentive\tPlan\t(for\toptions\tgranted\tunder |  |  |  |  |
|  | the\tELTSOP\toption\tprogram) |  |  |  |  |
| 10.4.8** | Form\tof\tNotice\tof\tGrant—Nonqualified\tStock\tOptions | 8-K | 000-06217 | 10.24 | 7/6/2006 |
| 10.4.9** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tTerms\tand | 10-K | 000-06217 | 10.42 | 2/26/2007 |

| Number | Exhibit	Description | Form | File	Number | Exhibit | Date |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 10.4.10** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | 8-K | 000-06217 | 10.1 | 5/16/2007 |
|  | restated,\teffective\tMay\t16,\t2007 |  |  |  |  |
| 10.4.11** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tTerms\tand | 8-K | 000-06217 | 99.1 | 4/17/2008 |
|  | Conditions\tRelating\tto\tRestricted\tStock\tUnits\tGranted\tto\tPaul\tS. |  |  |  |  |
|  | Otellini\ton\tApril\t17,\t2008\tunder\tthe\tIntel\tCorporation\t2006\tEquity |  |  |  |  |
|  | Incentive\tPlan\t(under\tthe\tELTSOP\tRSU\tProgram) |  |  |  |  |
| 10.4.12** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tStandard\tTerms\tand | 10-Q | 000-06217 | 10.1 | 4/30/2009 |
|  | Conditions\trelating\tto\tRestricted\tStock\tUnits\tgranted\ton\tand\tafter |  |  |  |  |
|  | March\t27,\t2009\tand\tbefore\tJanuary\t22,\t2010\tunder\tthe\tIntel |  |  |  |  |
|  | Corporation\t2006\tEquity\tIncentive\tPlan\t(standard\tOSU\tprogram) |  |  |  |  |
| 10.4.13** | Intel\tCorporation\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\t2006 | 10-Q | 000-06217 | 10.2 | 4/30/2009 |
|  | Equity\tIncentive\tPlan\t(for\tRSUs\tgranted\tafter\tMarch\t27,\t2009\tand |  |  |  |  |
|  | before\tJanuary\t22,\t2010\tunder\tthe\tstandard\tOSU\tprogram) |  |  |  |  |
| 10.4.14** | Form\tof\tTerms\tand\tConditions\tRelating\tto\tNonqualified\tOptions | 10-Q | 000-06217 | 10.3 | 4/30/2009 |
|  | Granted\tto\tPaul\tOtellini\tunder\tthe\tIntel\tCorporation\t2006\tEquity |  |  |  |  |
|  | Incentive\tPlan |  |  |  |  |
| 10.4.15** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | 8-K | 000-06217 | 10.1 | 5/22/2009 |
|  | restated,\teffective\tMay\t20,\t2009 |  |  |  |  |
| 10.4.16** | Intel\tCorporation\tNon-Employee\tDirector\tRestricted\tStock\tUnit | 10-Q | 000-06217 | 10.1 | 8/3/2009 |
|  | Agreement\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(for\tRSUs |  |  |  |  |
|  | granted\tafter\tJanuary\t17,\t2008) |  |  |  |  |
| 10.4.17** | Intel\tCorporation\tNon-Employee\tDirector\tRestricted\tStock\tUnit | 10-Q | 000-06217 | 10.2 | 8/3/2009 |
|  | Agreement\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(for\tRSUs |  |  |  |  |
|  | granted\tafter\tMarch\t27,\t2009\tand\tbefore\tJanuary\t22,\t2010\tunder |  |  |  |  |
|  | the\tOSU\tprogram) |  |  |  |  |
| 10.4.18** | Form\tof\tNotice\tof\tGrant\t-\tRestricted\tStock\tUnits | 10-Q | 000-06217 | 10.3 | 8/3/2009 |
| 10.4.19** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tStandard\tTerms\tand | 10-K | 000-06217 | 10.5 | 2/22/2010 |
|  | Conditions\trelating\tto\tNon-Qualified\tStock\tOptions\tgranted\tto\tA. |  |  |  |  |
|  | Douglas\tMelamed\ton\tJanuary\t22,\t2010\tunder\tthe\tIntel |  |  |  |  |
|  | Corporation\t2006\tEquity\tIncentive\tPlan\t(standard\toption\tprogram) |  |  |  |  |
| 10.4.20** | Standard\tTerms\tand\tConditions\trelating\tto\tRestricted\tStock\tUnits | 10-K | 000-06217 | 10.48 | 2/22/2010 |
|  | granted\ton\tand\tafter\tJanuary\t22,\t2010\tand\tbefore\tJanuary\t20, |  |  |  |  |
|  | 2011\tunder\tthe\tIntel\tCorporation\tEquity\tIncentive\tPlan\t(standard |  |  |  |  |
|  | OSU\tprogram) |  |  |  |  |
| 10.4.21** | Intel\tCorporation\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\tIntel | 10-K | 000-06217 | 10.49 | 2/22/2010 |
|  | Corporation\t2006\tEquity\tIncentive\tPlan\t(for\tRSUs\tgranted\tafter |  |  |  |  |
|  | January\t22,\t2010\tand\tbefore\tJanuary\t20,\t2011\tunder\tthe |  |  |  |  |
|  | standard\tOSU\tprogram) |  |  |  |  |
| 10.4.22** | Intel\tCorporation\tNon-Employee\tDirector\tRestricted\tStock\tUnit | 10-Q | 000-06217 | 10.1 | 7/30/2010 |
|  | Agreement\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(for\tRSUs |  |  |  |  |
|  | granted\tafter\tJuly\t1,\t2010\tand\tbefore\tJanuary\t20,\t2011\tunder\tthe |  |  |  |  |
|  | OSU\tprogram) |  |  |  |  |
| 10.4.23** | Intel\tCorporation\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\t2006 | 8-K | 000-06217 | 99.1 | 1/26/2011 |
|  | Equity\tIncentive\tPlan\t(for\tRSUs\tgranted\tafter\tJanuary\t20,\t2011 |  |  |  |  |
|  | under\tthe\tstandard\tManagement\tCommittee\tMember-Restricted |  |  |  |  |
|  | Stock\tUnit\tprogram) |  |  |  |  |
| 10.4.24** | Intel\tCorporation\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\t2006 | 8-K | 000-06217 | 99.2 | 1/26/2011 |

| Number | Exhibit	Description | Form | File	Number | Exhibit | Date |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 10.4.25** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tStandard\tTerms\tand | 8-K | 000-06217 | 99.3 | 1/26/2011 |
|  | Conditions\tRelating\tto\tRestricted\tStock\tUnits\tGranted\ton\tand |  |  |  |  |
|  | after\tJanuary\t20,\t2011\tand\tbefore\tJanuary\t24,\t2012\tunder\tthe |  |  |  |  |
|  | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\t(standard\tOSU |  |  |  |  |
|  | program) |  |  |  |  |
| 10.4.26** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tStandard\tTerms\tand | 8-K | 000-06217 | 99.4 | 1/26/2011 |
|  | Conditions\tRelating\tto\tRestricted\tStock\tUnits\tGranted\ton\tand |  |  |  |  |
|  | after\tJanuary\t20,\t2011\tunder\tthe\tIntel\tCorporation\t2006\tEquity |  |  |  |  |
|  | Incentive\tPlan\t(standard\tManagement\tCommittee\tMember\t- |  |  |  |  |
|  | Restricted\tStock\tUnit\tprogram) |  |  |  |  |
| 10.4.27** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | S-8 | 333-175123 | 99.1 | 6/24/2011 |
|  | restated,\teffective\tMay\t19,\t2011 |  |  |  |  |
| 10.4.28** | Intel\tCorporation\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\t2006 | 10-K | 000-06217 | 10.56 | 2/23/2012 |
|  | Equity\tIncentive\tPlan\t(for\tRSUs\tgranted\ton\tor\tafter\tJanuary\t24, |  |  |  |  |
|  | 2012\twith\tYear\t2\tto\tYear\t5\tVesting) |  |  |  |  |
| 10.4.29** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tStandard\tTerms\tand | 10-K | 000-06217 | 10.57 | 2/23/2012 |
|  | Conditions\tRelating\tto\tRestricted\tStock\tUnits\tGranted\ton\tand |  |  |  |  |
|  | after\tJanuary\t24,\t2012\tunder\tthe\tIntel\tCorporation\t2006\tEquity |  |  |  |  |
|  | Incentive\tPlan\t(with\tYear\t2\tto\t5\tVesting) |  |  |  |  |
| 10.4.30** | Terms\tand\tConditions\tof\tSuccess\tEquity\tAward\t(CEO | 10-Q | 000-06217 | 10.1 | 5/4/2012 |
|  | performance\tbased\tRSUs) |  |  |  |  |
| 10.5** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tTerms\tand | 10-Q | 000-06217 | 10.3 | 5/2/2008 |
|  | Conditions\tRelating\tto\tNon-Qualified\tStock\tOptions\tGranted\ton |  |  |  |  |
|  | April\t17,\t2008\tunder\tthe\tIntel\tCorporation\t2006\tEquity\tIncentive |  |  |  |  |
|  | Plan |  |  |  |  |
| 10.6** | Amendment\tto\tAll\tGrant\tAgreements\tof\tRestricted\tStock\tUnits | 10-Q | 000-06217 | 10.6 | 5/2/2008 |
|  | and\tStock\tOptions\tgranted\tunder\tthe\tIntel\tCorporation\t2006 |  |  |  |  |
|  | Equity\tIncentive\tPlan\t(elimination\tof\tleave\tof\tabsence\tprovisions |  |  |  |  |
|  | and\tthe\taddition\tof\tthe\tability\tto\tchange\tthe\tgrant\tagreement\tas |  |  |  |  |
|  | laws\tchange) |  |  |  |  |
| 10.7** | Amendment\tto\tthe\tRestricted\tStock\tUnit\tAgreement\tunder\tthe | 10-Q | 000-06217 | 10.1 | 4/29/2013 |
|  | 2006\tEquity\tIncentive\tPlan\t(for\tRSUs\tgranted\ton\tor\tafter\tJanuary |  |  |  |  |
|  | 24,\t2012\twith\tYear\t2\tto\tYear\t5\tVesting)\tand\tthe\tStandard\tTerms |  |  |  |  |
|  | and\tConditions\tRelating\tto\tRestricted\tStock\tUnits\tGranted\ton\tand |  |  |  |  |
|  | after\tJanuary\t24,\t2012\tunder\tthe\tIntel\tCorporation\t2006\tEquity |  |  |  |  |
|  | Incentive\tPlan\t(with\tYear\t2\tto\t5\tVesting) |  |  |  |  |
| 10.8** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | 10-Q | 000-06217 | 10.1 | 7/29/2013 |
|  | restated,\teffective\tMay\t16,\t2013 |  |  |  |  |
| 10.9** | Intel\tCorporation\t2007\tExecutive\tOfficer\tIncentive\tPlan,\teffective | 8-K | 000-06217 | 10.2 | 5/16/2007 |
|  | as\tof\tJanuary\t1,\t2007 |  |  |  |  |
| 10.9.1** | Amendment\tto\tthe\tIntel\tCorporation\t2007\tExecutive\tOfficer | 10-K | 000-06217 | 10.31 | 2/23/2012 |
|  | Incentive\tPlan,\teffective\tas\tof\tJanuary\t1,\t2012 |  |  |  |  |
| 10.9.2** | Intel\tCorporation\t2014\tAnnual\tPerformance\tBonus\tPlan |  |  |  |  |
|  | (amended\tand\trestated,\teffective\tJanuary\t1,\t2014) |  |  |  |  |
| 10.10** | Intel\tCorporation\tDeferral\tPlan\tfor\tOutside\tDirectors,\teffective | 10-K | 333-45395 | 10.6 | 3/26/1999 |
|  | July\t1,\t1998 |  |  |  |  |
| 10.11** | Form\tof\tIndemnification\tAgreement\twith\tDirectors\tand\tExecutive | 10-K | 000-06217 | 10.15 | 2/22/2005 |
|  | Officers |  |  |  |  |
| 10.12** | Listed\tOfficer\tCompensation | 10-Q | 000-06217 | 10.1 | 5/3/2007 |
| 10.13** | Intel\tCorporation\tSheltered\tEmployee\tRetirement\tPlan\tPlus,\tas | S-8 | 333-172024 | 99.1 | 2/2/2011 |
|  | amended\tand\trestated,\teffective\tJanuary\t1,\t2009 |  |  |  |  |
| 10.14** | Intel\tCorporation\t2006\tStock\tPurchase\tPlan,\tapproved\tMay\t17, | S-8 | 333-135178 | 99.1 | 6/21/2006 |

** Management	contracts	or	compensation	plans	or	arrangements	in	which	directors	or	executive	officers	are	eligible	to	participate.

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	Registrant	has	duly	caused	this	report	to	be	signed	on	its behalf	by	the	undersigned,	thereunto	duly	authorized.

# Registrant

# Stacy	J.	Smith

Executive	Vice	President,	Chief	Financial	Officer,	and

# Principal	Accounting	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the Registrant	and	in	the	capacities	and	on	the	dates	indicated.

# Brian	M.	Krzanich

Chief	Executive	Officer,	Director Principal	Executive	Officer



Question: what was the difference in percentage five-year cumulative return for intel versus the s&p 500 index for the five years ended 2013?
Answer: -22%