# 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	26,	2015.

¨ 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)

Delaware

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

The	NASDAQ	Global	Select	Market*

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	website,	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	26,	2015,	based	upon	the	closing	price	of	the	common	stock	as reported	by	The	NASDAQ	Global	Select	Market	on	such	date,	was

4,724	million	shares	of	common	stock	outstanding	as	of	February	5,	2016

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	registrant's	proxy	statement	related	to	its	2016	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 | 20 |
| Item\t1B. | Unresolved\tStaff\tComments | 28 |
| Item\t2. | Properties | 28 |
| Item\t3. | Legal\tProceedings | 28 |
| Item\t4. | Mine\tSafety\tDisclosures | 28 |
|  | PART\tII |  |
| Item\t5. | Market\tfor\tRegistrant's\tCommon\tEquity,\tRelated\tStockholder\tMatters\tand\tIssuer\tPurchases\tof\tEquity\tSecurities | 29 |
| Item\t6. | Selected\tFinancial\tData | 31 |
| Item\t7. | Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 32 |
| Item\t7A. | Quantitative\tand\tQualitative\tDisclosures\tAbout\tMarket\tRisk | 56 |
| Item\t8. | Financial\tStatements\tand\tSupplementary\tData | 58 |
| Item\t9. | Changes\tin\tand\tDisagreements\tWith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 124 |
| Item\t9A. | Controls\tand\tProcedures | 124 |
| Item\t9B. | Other\tInformation | 125 |
|  | PART\tIII |  |
| Item\t10. | Directors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | 126 |
| Item\t11. | Executive\tCompensation | 126 |
| Item\t12. | Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | 127 |
| Item\t13. | Certain\tRelationships\tand\tRelated\tTransactions,\tand\tDirector\tIndependence | 127 |
| Item\t14. | Principal\tAccounting\tFees\tand\tServices | 127 |
|  | PART\tIV |  |
| Item\t15. | Exhibits,\tFinancial\tStatement\tSchedules | 128 |

Table	of	Contents

# PART	I

# ITEM	1. BUSINESS

# Company	Overview

We	are	a	leader	in	the	design	and	manufacturing	of	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	across	the	compute	continuum,	in	notebooks	(including	Ultrabook ™	devices),	2	in	1	systems,	desktops,	servers, tablets,	phones,	and	the	Internet	of	Things	(including	wearables,	retail	devices,	and	manufacturing	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	vision	is	if	it	is	smart	and	connected,	it	is	best	with	Intel ®.	As	a	result,	our	strategy	is	to	offer	complete	and	connected	platform	computing	solutions, consisting	of	both	hardware	and	software,	and	to	continue	to	drive	"Moore's	Law."	Through	enhanced	energy-efficient	performance,	connectivity,	and security,	we	enable	platform	solutions	that	span	the	compute	continuum,	from	high-performance	computing	systems	running	trillions	of	operations	per second	to	embedded	applications	consuming	milliwatts	of	power.

The	boundaries	of	computing	itself	are	expanding,	with	billions	of	devices	connected	to	the	Internet	and	to	one	another.	Computing	is	becoming increasingly	personal	and	enhancing	nearly	all	aspects	of	life,	an	evolution	that	we	refer	to	as	the	"personalization	of	compute."	As	the	personalization	of compute	continues,	we	believe	the	following	three	key	assumptions	are	critical	to	our	strategy:

•sensification	of	compute	-	as	computing	becomes	increasingly	personal,	users	will	demand	that	it	capture	the	human	senses	such	as	sight,	sound, and	touch;

•smart	and	connected	-	more	and	more	devices	will	be	able	to	process	data	and	connect	to	the	cloud,	other	devices,	or	people;	and

•extension	of	you	-	increasingly	personal	digital	devices	and	their	many	form	factors	will	become	even	more	ubiquitous	in	our	lives.

These	assumptions	drive	us	to	develop	complete	and	connected	platform	solutions	and	compelling	user	experiences.	These	assumptions	also	drive synergistic	growth	in	our	Data	Center	Group,	Internet	of	Things	Group,	and	Non-Volatile	Memory	Solutions	Group	operating	segments.

As	more	devices	become	smart	and	connected,	specifically	in	the	Internet	of Things	(IOT),	there	is	greater	demand	for	data	centers	to	not	only	connect	these devices,	but	also	to	capture	and	analyze	the	data	they	create.	In	addition, improvements	in	memory	technology	are	enabling	faster	and	more	efficient microprocessors.	We	call	the	cycle	of	growth	that	occurs	as	these	three	market segments	feed	each	other	the	"Virtuous	Cycle	of	Growth."	As	we	execute	to	our strategy,	these	market	segments	will	continue	to	have	greater	impact	on	our results	and	our	future	as	a	company.

# Virtuous	Cycle	of	Growth

We	expect	that	our	acquisition	of	Altera	Corporation	(Altera),	completed subsequent	to	fiscal	year-end	2015,	will	benefit	this	cycle	of	growth.	The	Altera acquisition	is	an	example	of	our	efforts	to	expand	our	reach	within	the	compute continuum,	as	we	believe	that	combining	our	leading-edge	products	and manufacturing	process	with	Altera's	leading	field-programmable	gate	array (FPGA)	technology	will	enable	new	classes	of	platforms	that	meet	customer	needs in	the	data	center	and	Internet	of	Things	market	segments.

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

•relentlessly	pursue	Moore's	Law	to	maximize	and	extend	our	manufacturing	technology	leadership;

•strive	to	ensure	that	Intel ®	technology	is	the	best	choice	across	the	compute	continuum	and	across	any	operating	system;

•enable	smart	and	connected	devices	through	continued	development	of	industry-leading	communications	and	connectivity	technology;

•expand	platforms	into	adjacent	market	segments	to	bring	compelling	new	platform	solutions	and	user	experiences	to	form	factors	across	the	compute continuum;

•increase	the	utilization	of	our	investments	in	intellectual	property	and	research	and	development	(R&D)	across	all	market	segments;

•expand	the	data	center,	the	Internet	of	Things,	and	next-generation	memory;

•scale	our	manufacturing	capabilities	into	foundry;	and

•strive	to	increase	the	diversity	and	inclusion	of	our	workforce,	reduce	the	environmental	footprint	of	our	products	and	operations,	and	be	an	asset	to the	communities	where	we	conduct	business.

We	use	our	core	assets	to	meet	these	objectives.	We	believe	that	applying	our	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.	Intel	co-founder	Gordon	Moore	predicted,	in	what	has	become	known	as Moore's	Law,	that	transistor	density	on	integrated	circuits	would	double	about	every	two	years.	We	continue	executing	to	Moore's	Law	by	enabling new	devices	with	higher	functionality	and	complexity	while	controlling	power,	cost,	and	size. 	In	keeping	with	Moore's	Law,	we	drive	a	regular	and predictable	upgrade	cycle—introducing	the	next	generation	of	silicon	process	technology	approximately	every	two	to	three	years.	Through	this	cycle, we	continue	to	push	progress	by	designing	and	putting	transistor	innovations	into	high-volume	production.	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	enables	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	leverage	platform	design	and	manufacturing.

•Architecture	and	Platforms.	We	believe	that	users	want	consistent	computing	experiences	and	interoperable	devices,	and	that	users	and	developers value	consistency	of	a	standardized	architecture.	This	standardized	architecture	provides	a	common	framework	that	results	in	shortened	time-to- market,	increased	innovation,	and	the	ability	to	leverage	technologies	across	multiple	form	factors.	We	have	an	advantage	over	most	competitors because	we	are	able	to	share	intellectual	property	across	our	platforms	and	operating	segments,	which	reduces	our	costs	and	provides	a	higher return	on	capital	in	our	growth	market	segments	(e.g.,	the	data	center,	Internet	of	Things,	and	memory).	The	combination	of	our	shared	intellectual property	portfolio	and	our	interchangeable	manufacturing	and	assembly	and	test	assets	allows	us	to	seamlessly	shift	our	production	capabilities	to respond	to	market	demand.	We	believe	that	we	can	meet	the	needs	of	users	and	developers	by	offering	complete	solutions	across	the	compute 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	the	lowest	power.	In addition,	the	personalization	of	compute	continues	to	drive	our	strategy	as	we	focus	on	technologies	such	as	perceptual	computing,	which	brings exciting	experiences	through	devices	that	sense,	perceive,	and	interact	with	the	user's	actions.

•Software	and	Services.	We	offer	software	and	services	that	provide	solutions	through	a	combination	of	hardware	and	software	for	consumer	and corporate	environments.	Additionally,	we	seek	to	enable	and	advance	the	computing	ecosystem	by	providing	development	tools	and	support	to	assist software	developers	in	creating	software	applications	that	take	advantage	of	our	platforms.	We	seek	to	expedite	growth	in	various	market	segments through	our	software	offerings.	We	continue	to	collaborate	with	companies	to	develop	software	platforms	that	are	optimized	for	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	and	bring	unique	hardware, software,	and	end-to-end	security	solutions	to	the	market.	We	offer	proactive	solutions	and	services	to	help	secure	the	world's	most	critical	systems and	networks.	Additionally,	through	our	McAfee®	security	products,	we	protect	consumers	and	businesses	of	all	sizes	by	helping	detect	and	eliminate ever-evolving	security	threats.

•Customer	Orientation.	We	focus	on	providing	compelling	user	experiences	by	developing	our	next	generation	of	products	based	on	customer	needs and	expectations.	In	turn,	our	products	help	enable	the	design	and	development	of	new	user	experiences,	form	factors,	and	usage	models	for businesses	and	consumers.	For	example,	we	enhance	the	computing	experience	by	providing	Intel®	RealSense™	technology,	password	elimination, and	our	next-generation	Thunderbolt™	3	technology.	Our	latest	Thunderbolt	technology	significantly	increases	the	speed	at	which	data	and	video	can be	transferred	on	a	single	cable,	while	simultaneously	supplying	power.	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	products.	Additionally,	we have	entered	into	strategic	partnerships	across	multiple	industries	with	a	variety	of	manufacturers,	including:	Microsoft	Corporation;	Fossil	Group,	Inc.; LVMH	Moët	Hennessy	Louis	Vuitton	SE;	SMS	Audio,	LLC;	Opening	Ceremony,	LLC;	and	others.	Furthermore,	we	promote	industry	standards	that	we believe	will	yield	innovation	and	improved	technologies	for	users.

•Acquisitions	and	Strategic	Investments.	In	Q1	2016,	we	completed	the	acquisition	of	Altera.	 Altera	is	a	global	semiconductor	company	that	designs and	sells	programmable	semiconductors	and	related	products,	including	programmable	logic	devices—which	incorporate	FPGAs	and	complex programmable	logic	devices—and	highly	integrated	System-on-Chip	(SoC)	devices.	As	a	result	of	the	acquisition,	we	expect	to	integrate approximately	3,000	Altera	employees.	The	acquisition	of	Altera	reflects	our	strategy	to	drive	Moore's	Law	and	fuel	growth	in	the	data	center	and Internet	of	Things	market	segments.	As	we	develop	future	platforms,	the	integration	of	PLDs	into	our	platform	solutions	will	improve	the	overall performance	and	lower	the	cost	of	ownership	for	our	customers.	Additionally,	we	make	investments	in	companies	around	the	world	that	we	believe will	further	our	vision,	mission,	and	strategic	objectives;	support	our	key	business	initiatives;	and	generate	financial	returns.	Our	investments— including	those	made	through	Intel	Capital—generally	focus	on	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.	During	2015,	we	invested	$966	million	in	Beijing UniSpreadtrum	Technology	Ltd.	(UniSpreadtrum),	a	holding	company	under	Tsinghua	Unigroup	Ltd.	(an	operating	subsidiary	of	Tsinghua	Holdings Co.	Ltd.),	to,	among	other	things,	jointly	develop	Intel	architecture-based	and	communications-based	solutions	for	phones.	Additionally,	we	plan	to continue	to	purchase	and	license	intellectual	property	to	support	our	current	and	expanding	business.

•Corporate	Responsibility.	Diversity	and	inclusion	are	integral	parts	of	Intel's	competitive	strategy	and	vision.	In	January	2015,	Intel	announced	the Diversity	in	Technology	initiative,	setting	a	goal	to	achieve	higher	representation	of	women	and	underrepresented	minorities	in	Intel's	U.S.	workforce by	2020.	We	are	also	investing	$300	million	to	help	build	the	STEM	pipeline,	to	support	hiring	and	retaining	more	women	and	underrepresented minorities,	and	to	fund	programs	to	support	more	positive	representation	within	the	technology	and	gaming	industries.	We	are	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	an	inclusive	work	environment	in	which	engaged,	energized employees	can	thrive	in	their	jobs	and	in	their	communities.	We	work	to	develop	energy-efficient	technology	solutions	that	can	be	used	to	address major	global	problems	while	reducing	our	environmental	impact.	We	have	also	led	the	industry	on	the	"conflict	minerals"	issue	and	have	worked extensively	since	2008	to	put	in	place	processes	and	systems	to	develop	ethical	sourcing	of	tin,	tantalum,	tungsten,	and	gold	for	Intel	and	to	prevent profits	from	the	sale	of	those	minerals	from	funding	conflict	in	the	Democratic	Republic	of	the	Congo	(DRC)	and	adjoining	countries.

We	strive	to	strengthen	our	competitive	position	as	we	enter	and	expand	into	adjacent	market	segments.	These	market	segments	change	rapidly,	and	we need	to	adapt	to	new	environments.	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	and Intel®	Quark™	technology.	We	are	also	optimizing	our	server	products	for	energy-efficient	performance,	as	we	believe	that	increased	Internet	traffic	and	the use	of	mobile	devices,	the	Internet	of	Things,	and	data	center	applications	have	created	the	need	for	improved	data	center	infrastructure	and	energy efficiency.

# Business	Organization

In	Q1	2015,	we	made	changes	in	our	organizational	structure	to	reflect	our	strategy	to	address	all	aspects	of	the	client	computing	market	segment	and utilize	our	intellectual	property	to	offer	compelling	customer	solutions.	As	of	December	26,	2015,	we	manage	our	business	through	the	following	operating segments:

For	a	description	of	our	operating	segments,	see	" Note	26:	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	a	multichip package.	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.	In	addition,	many	of	our	processor	families	integrate	graphics	functionality	onto	the	processor	die.

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	CPUs	with	other	system	components,	such	as	graphics,	audio,	imaging,	communication and	connectivity,	and	video,	onto	a	single	chip.	SoC	products	are	designed	to	reduce	total	cost	of	ownership,	provide	improved	performance	due	to	higher integration	and	the	lowest	power,	and	enable	form	factors	such	as	tablets,	phones,	Ultrabook	devices,	and	2	in	1	systems,	as	well	as	notebooks, desktops,	data	center	products,	and	the	Internet	of	Things.

We	offer	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	an	SoC,	the	multichip	package	can	provide	improved	performance	due	to	higher	integration	coupled	with	the	lowest	power consumption,	which	enables	smaller	form	factors.	In	2015,	we	released	our	6th	generation	Intel®	Core™	processor,	formerly	code-named	Skylake.

We	also	offer	features	designed	to	improve	our	platform	capabilities,	such	as:

•Intel	vPro™	technology,	a	solution	for	manageability,	security,	and	business	user	experiences	in	the	notebook,	desktop,	and	2	in	1	systems	and select	Internet	of	Things	market	segments.	Intel	vPro	technology	is	designed	to	provide	businesses	with	increased	manageability,	upgradeability,

energy-efficient	performance,	and	security	while	lowering	the	total	cost	of	ownership;

•Intel	RealSense	technology,	which—in	conjunction	with	the	latest	Intel	processors—enables	a	device	to	perceive	depth	similar	to	how	a	person	does.

This	technology	brings	new	opportunities	for	the	personalization	of	compute	to	evolve;	and

•True	Key™	technology,	which	allows	users	to	access	devices	through	facial	recognition	and	other	biometric	technologies,	thereby	eliminating	the	need for	log-in	passwords.

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

# Intel	Security	Products

Through	our	McAfee	products,	we	deliver	innovative	solutions	that	secure	computers,	mobile	devices,	and	networks.	Our	security	solutions	follow	the threat	defense	life	cycle	(protect,	detect,	correct)	to	defend	consumers,	small	businesses,	and	enterprises	from	malware	and	emerging	online	threats.	In 2015,	Intel	launched	McAfee®	Endpoint	Security	10.X,	which	enables	customers	to	tackle	the	threat	defense	life	cycle	with	reduced	complexity	and	better performance.	McAfee	Endpoint	Security	10.X	introduces	a	new	platform	built	to	enable	real-time	communication	between	threat	defenses	for	more effective	protection	against	emerging	threats.

# Communication	and	Connectivity

Our	communication	and	connectivity	offerings	for	tablets,	phones,	and	other	connected	devices	include	baseband	processors,	radio	frequency transceivers,	and	power	management	integrated	circuits.	We	also	offer	comprehensive	tablet,	phone,	and	Internet	of	Things	solutions,	which	include multimode	4G	LTE*	modems,	Bluetooth®	technology	and	GPS	receivers,	software	solutions,	customization,	and	essential	interoperability	tests.

# 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)	and	Micron	Technology,	Inc.	(Micron).	In	2015,	Intel	announced	3D	XPoint™	technology,	a	non-volatile	memory	that	has	the potential	to	revolutionize	devices,	applications,	or	services	that	benefit	from	fast	access	to	large	sets	of	data.	Jointly	developed	with	Micron,	3D	XPoint technology	combines	the	performance,	density,	power,	non-volatility,	and	cost	advantages	of	existing	NAND	and	conventional	memories	like	DRAM.

# Intel	Custom	Foundry

We	offer	manufacturing	technologies	and	design	services	for	our	customers.	Our	foundry	offerings	include	full	custom	silicon,	packaging,	and manufacturing	test	services.	We	also	provide	semi-custom	services	to	tailor	Intel	architecture-based	solutions	with	customers'	intellectual	property	blocks. To	enable	our	customers	to	use	our	custom	foundry	services,	we	offer	industry-standard	design	kits,	intellectual	property	blocks,	and	design	services.

# Products	and	Product	Strategy	by	Operating	Segment

Our	Client	Computing	Group	(CCG)	operating	segment	is	responsible	for	all	aspects	of	the	client	computing	continuum,	which	includes	platforms	that are	incorporated	in	notebook	(including	Ultrabook	devices),	2	in	1	systems,	desktop	computers	for	consumers	and	businesses,	tablets,	and	phones.	In addition,	CCG	offers	home	gateway	products	and	set-top	box	components,	and	focuses	on	a	broad	range	of	wireless	connectivity	options	that	combine Intel®	WiFi	technology	with	our	2G	and	3G	technologies	and	accelerate	industry	adoption	of	4G	LTE.	We	have	an	array	of	innovative	wired	solutions	such as	Thunderbolt	technology	and	client	Ethernet	solutions.

In	2015,	we	released	the	6th	generation	Intel	Core	processor	family	for	use	in	notebooks	and	desktops.	These	processors	use	14-nanometer (nm)	transistors	and	our	Tri-Gate	transistor	technology.	Our	Tri-Gate	transistor	technology	extends	Moore's	Law	by	providing	improved	performance	and energy	efficiency.	In	combination,	these	enhancements	can	provide	significant	power	savings	and	performance	gains	when	compared	to	previous- generation	processors.

In	mobile	communications,	we	expanded	our	product	portfolio	with	the	release	of	our	Intel ®	Atom™	x5	and	x7	processors,	formerly	code	named	Cherry Trail	and	designed	for	mainstream	and	premium	tablet	platforms.	These	processors	may	be	paired	with	our	second-generation	4G	LTE	solution,	featuring CAT6	and	carrier	aggregation.	We	also	released	our	Intel®	Atom™	x3	processor,	formerly	coded	named	SoFIA	3G,	our	first	integrated	baseband	and	SoC application	processor	designed	for	entry	and	value	phone	and	tablet	platforms.

# 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	design	for	innovative	smaller,	lighter,	and	thinner	form factors.	Our	6th	generation	Intel	Core	processor	continues	to	deliver	or	enable	increasing	levels	of	performance,	graphics,	and	energy	efficiency,	and	will provide	our	customers	and	end	users	with	multiple	choices	in	processor	cores,	graphic	performance,	and	battery	life.

We	have	worked	to	help	our	customers	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	thin,	light	form	factors	that	are	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.	For	example,	in	2015	we	introduced	a	new	user	experience	in	the	Intel®	Compute	Stick,	a	device	that	allows users	to	transform	HDMI-capable	monitors	or	TVs	into	complete	computers	to	get	the	most	out	of	their	display	devices.	We	also	focus	on	lowering	the total	cost	of	ownership	for	businesses.	The	desktop	computing	market	segment	includes	all-in-one	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	(DCG)	operating	segment	offers	products	designed	to	provide	leading	energy-efficient	performance	for	all	server,	network,	and storage	platforms.	In	addition,	DCG	focuses	on	lowering	the	total	cost	of	ownership	and	on	other	specific	optimizations	for	the	enterprise,	cloud, communications	infrastructure,	and	technical	computing	segments.	In	2015,	we	launched	the	Intel®	Xeon®	processor	D	family,	our	first	Intel	Xeon processor-based	SoC	product	family,	which	extends	our	portfolio	for	network,	storage,	and	high-density	servers.	In	addition,	we	launched	the	Intel	Xeon processor	E7	v3	family,	targeted	at	platforms	requiring	four	or	more	CPUs;	this	processor	family	delivers	performance	advancements	over	previous generations,	along	with	industry-leading	reliability,	availability,	and	serviceability.	We	also	released	the	Intel	Xeon	processor	E3	v5	family	on	our	14nm process	technology,	targeted	for	entry-level	servers	and	workstations.	In	2016,	we	expect	to	release	our	next-generation	Intel	Xeon	E5	and	E7	families	on our	14nm	process	technology.	Additionally,	we	expect	to	release	in	2016	our	next-generation	Intel®	Xeon	Phi™	product	family,	code-named	"Knights Landing,"	with	up	to	72	high-performance	Intel	processor	cores,	integrated	memory	and	fabric,	and	a	common	software	programming	model	with	Intel Xeon	processors.	Knights	Landing	is	designed	for	highly	parallel	compute-	and	memory	bandwidth-intensive	workloads.	Intel	Xeon	Phi	coprocessors	are positioned	to	increase	the	performance	of	supercomputers,	enabling	trillions	of	calculations	per	second,	and	to	address	emerging	data	analytics	solutions.

Our	Internet	of	Things	Group	(IOTG)	operating	segment	offers	platforms	designed	for	retail,	transportation,	industrial,	buildings	and	home	use,	along with	a	broad	range	of	other	market	segments.	In	addition,	IOTG	focuses	on	establishing	an	end-to-end	manageable	architecture	that	captures	actionable information	for	consumers.	In	2015,	we	announced	three	new	Intel	Quark	processors,	including	the	Intel®	Quark™	SE	SoC	and	the	Intel	Quark microcontrollers	D1000	and	D2000.

Our	software	and	services	operating	segments	seek	to	create	differentiated	user	experiences	on	Intel ®-based	platforms.	We	differentiate	by	combining Intel	platform	features	with	enhanced	software	and	services,	and	partnering	closely	with	the	external	software	developer	ecosystem.	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 •protecting	consumers,	small	businesses,	and	enterprises	from	malware	and	emerging	online	threats.

# Revenue	by	Major	Operating	Segment

Net	revenue	for	the	Client	Computing	Group	(CCG)	operating	segment,	the	Data	Center	Group	(DCG)	operating	segment,	the	Internet	of	Things	Group (IOTG)	operating	segment,	and	the	aggregated	software	and	services	(SSG)	operating	segments	is	presented	as	a	percentage	of	our	consolidated	net revenue.	SSG	includes	Intel	Security	Group	and	the	Software	and	Services	Group	operating	segments.	The	"all	other"	category	consists	primarily	of revenue	from	the	Non-Volatile	Memory	Solutions	Group	(NSG)	and	the	New	Devices	Group	operating	segments.

# 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	marketplace	can change	quickly	in	response	to	the	introduction	of	such	technologies	and	products	and	other	factors	such	as	changes	in	customer	and	end-user requirements,	expectations,	and	preferences.	As	technologies	evolve	and	new	market	segments	emerge,	the	boundaries	between	the	market	segments that	we	compete	in	are	also	subject	to	change.

Intel	faces	significant	competition	in	the	development	and	market	acceptance	of	our	products	in	this	environment.	Our	platforms,	based	on	Intel architecture,	are	positioned	to	compete	across	the	compute	continuum,	from	the	lowest	power	and	mobile	devices	to	the	most	powerful	data	center servers.	Our	platforms,	which	have	integrated	hardware	and	software,	offer	customers	benefits	such	as	ease	of	use,	savings	in	total	cost	of	ownership, and	the	ability	to	scale	systems	to	accommodate	increased	usage.

# Competitors

We	compete	against	other	companies	that	make	and	sell	platforms,	other	silicon	components,	and	software	to	businesses	that	build	and	sell	computing and	communications	devices	to	end	users.	Our	competitors	also	include	companies	that	sell	goods	and	services	to	businesses	that	use	them	for	their internal	and/or	customer-facing	processes	(e.g.,	businesses	running	large	data	centers).	In	addition,	we	face	competition	from	OEMs,	ODMs,	and	other industrial	and	communications	equipment	manufacturers	that,	to	some	degree,	choose	to	vertically	integrate	their	own	proprietary	semiconductor	and software	assets.	By	doing	so,	these	competitors	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	industry	participants	through,	for	example,	acquisitions	or	business	collaborations	could	also have	a	significant	impact	on	our	competitive	position.

In	the	PC	market	segment,	we	are	a	leading	provider	of	platforms	for	traditional	desktops	and	notebooks.	We	face	existing	and	emerging	competition	in these	product	areas.	Tablets,	phones,	and	other	mobile	devices	offered	by	numerous	vendors	are	significant	competitors	to	traditional	PCs	for	many usages.	We	are	relatively	recent	providers	of	platforms	for	tablets	and	phones,	and	face	strong	competition	from	vendors	that	use	applications	processors based	on	the	ARM*	architecture;	feature	low-power,	long	battery-life	operation;	and	are	built	in	SoC	formats	that	integrate	numerous	functions	on	one chip.

In	the	data	center	market	segment,	we	are	a	leading	provider	of	data	center	platforms	and	face	competition	from	companies	using	ARM	architecture	or other	technologies.	Internet	cloud	computing,	storage,	and	networking	are	areas	of	significant	targeted	growth	for	us	in	the	data	center	segment,	and	we face	strong	competition	in	these	market	segments.

In	the	Internet	of	Things	market	segment,	we	have	a	long-standing	position	as	a	supplier	of	components	and	software	for	embedded	products.	This marketplace	continues	to	significantly	expand	with	increasing	types	and	numbers	of	smart	and	connected	devices	for	industrial,	commercial,	and consumer	uses	such	as	wearables.	As	this	market	segment	evolves,	we	face	numerous	large	and	small	incumbent	competitors	as	well	as	new	entrants that	use	ARM	architecture	and	other	operating	systems	and	software.

Our	security	business	operates	in	highly	competitive,	fragmented,	and	rapidly	changing	market	segments.	We	are	a	major	provider	of	cybersecurity products	and	services	to	both	businesses	and	consumers.	For	businesses,	we	compete	with	companies	selling	individual	point	security	products	and companies	selling	multiple	security	products.	We	offer	to	businesses	a	portfolio	of	products	that	are	integrated	into	a	comprehensive	security	solution.	For consumers,	we	primarily	compete	against	other	major	security	companies	and	providers	of	free	security	products.	Our	consumer	offerings	are	designed	to protect	user	data,	identity,	and	devices	across	the	compute	continuum.

In	the	memory	market	segment,	we	compete	against	other	providers	of	NAND	flash	memory	products.	We	focus	our	efforts	primarily	on	incorporating NAND	flash	memory	into	solution	products,	such	as	solid-state	drives	supporting	consumer	and	enterprise	applications.	We	believe	that	our	memory offerings,	including	innovative	developments	such	as	3D	XPoint	technology,	will	complement	our	other	product	offerings	in	our	other	segments.

Our	products	primarily	compete	based	on	performance,	energy	efficiency,	integration,	innovative	design,	features,	price,	quality,	reliability,	brand recognition,	technical	support,	and	availability.	The	importance	of	these	factors	varies	by	the	type	of	end	system	for	the	products.	For	example, performance	might	be	among	the	most	important	factors	for	our	products	for	data	center	servers,	while	price	and	integration	might	be	among	the	most important	factors	for	our	products	for	tablets,	phones,	and	other	mobile	devices.

# Competitive	Advantages

# Our	key	competitive	advantages	include:

•Transitions	to	next-generation	technologies.	We	have	a	market	lead	in	transitioning	to	the	next-generation	process	technology	and	bringing	products to	market	using	such	technology.	Our	products	utilizing	our	14nm	process	technology	are	in	the	market	and	we	are	continuing	to	work	on	the development	of	our	next-generation	10nm	process	technology.	We	believe	that	these	advancements	will	offer	significant	improvements	in	one	or	more of	the	following	areas:	performance,	new	features,	energy	efficiency,	and	cost.

•Combination	of	our	network	of	manufacturing	and	assembly	and	test	facilities	with	our	global	architecture	design	teams .	We	have	made	significant capital	and	R&D	investments	into	our	integrated	manufacturing	network,	which	enables	us	to	have	more	direct	control	over	our	design,	development, and	manufacturing	processes;	quality	control;	product	cost;	production	timing;	performance;	power	consumption;	and	manufacturing	yield.	The increased	cost	of	constructing	new	fabrication	facilities	to	support	smaller	transistor	geometries	and	larger	wafers	has	led	to	a	reduced	number	of companies	that	can	build	and	equip	leading-edge	manufacturing	facilities.	Most	of	our	competitors	rely	on	third-party	foundries	and	subcontractors	for manufacturing	and	assembly	and	test	needs.	We	provide	foundry	services	as	an	alternative	to	such	foundries.

•Products	optimized	to	operate	on	multiple	operating	systems .	Through	our	collaboration	with	our	customers	and	other	third	parties,	many	of	our products	can	operate	on	multiple	operating	systems	in	end-user	products	and	platforms.

# Manufacturing	and	Assembly	and	Test

As	of	December	26,	2015,	55%	of	our	wafer	fabrication,	including	microprocessors	and	chipsets,	was	conducted	within	the	U.S.	at	our	facilities	in	Arizona, Oregon,	and	New	Mexico.	Our	Massachusetts	fabrication	facility	was	our	last	manufacturing	facility	on	 200	millimeter	(mm)	wafers	and	ceased	production in	Q1	2015.	The	remaining	45%	of	our	wafer	fabrication	was	conducted	outside	the	U.S.	at	our	facilities	in	Ireland,	Israel,	and	China.	 Our	fabrication facility	in	Ireland	has	transitioned	to	our	14nm	process	technology,	with	manufacturing	continuing	to	ramp	in	2016.	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	26,	2015,	we	manufactured	our	products	in	wafer	fabrication	facilities	at	the	following	locations:

| Products | Wafer	Size | Process	Technology | Locations |
| :--- | :--- | :--- | :--- |
| Microprocessors\tand\tother\tproducts | 300mm | 14nm | \t Arizona,\tOregon,\tIreland |
| Microprocessors\tand\tother\tproducts | 300mm | 22nm | Israel,\tArizona,\tOregon |
| Microprocessors\tand\tchipsets | 300mm | 32nm | \t New\tMexico |
| Microprocessors | 300mm | 45nm | \t New\tMexico |
| Microprocessors\tand\tchipsets | 300mm | 65nm | \t China |

As	of	December	26,	2015,	our	microprocessors	were	manufactured	on	300mm	wafers,	with	a	 substantial	majority	manufactured	using	our	14nm,	22nm, and	32nm	process	technologies.	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	enable	us	to	introduce	new	devices	with higher	functionality	and	complexity	while	controlling	power,	cost,	and	size.	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	newer	process	technologies	are	significantly	less	than adding	capacity	by	building	additional	wafer	fabrication	facilities	using	older	process	technologies.

We	use	third-party	foundries	to	manufacture	wafers	for	certain	components,	including	communications,	connectivity,	and	networking	products.	For example,	the	Intel	Atom	x3	processor	is	fabricated	by	a	third-party	foundry.	In	addition,	we	primarily	use	subcontractors	to	manufacture	board-level products	and	systems.	We	purchase	certain	communications	and	connectivity	products	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,	and	Vietnam .	To	augment	capacity,	we	use	subcontractors	to	perform	assembly	and	test	of	certain	products,	primarily chipsets	and	communications	and	connectivity	products.

Our	NAND	flash	memory	products	are	manufactured	by	IMFT	and	Micron	using	20nm	or	25nm	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.	Additionally,	in	the	second	half	of	2016,	we	will	start	using	our	facility	in	Dalian,	China	to	help	expand	our	manufacturing	capacity	in	next- generation	memory.	The	expansion	is	part	of	our	multi-source	supply	strategy	and	will	allow	us	to	best	serve	our	customers.

Our	employment	and	operating	practices	are	consistent	with,	and	we	expect	our	suppliers	and	subcontractors	to	abide	by,	local	country	law.	Intel	expects all	suppliers	to	comply	with	our	Code	of	Conduct	and	the	Electronic	Industry	Citizenship	Coalition	(EICC)	Code	of	Conduct,	both	of	which	set	standards that	address	the	rights	of	workers	to	safe	and	healthy	working	conditions,	environmental	responsibility,	compliance	with	privacy	and	data	security obligations,	and	compliance	with	applicable	laws.

We	have	thousands	of	suppliers,	including	subcontractors,	providing	our	various	materials,	equipment,	and	service	needs.	We	set	expectations	for supplier	performance	and	reinforce	those	expectations	with	periodic	assessments	and	audits.	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	help	ensure	a	stable	supply	of	silicon	and	semiconductor	manufacturing	tools.

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	$12.1	billion	in	2015	($11.5	billion	in	2014	and	$10.6	billion	in	2013).

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	memory	and	the	Internet	of	Things),	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,	system-level	integration, 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	on	a	regular	cadence.	We	expect	to	lengthen	the	amount	of	time	we	will	utilize	our	14nm	and	our	next-generation 10nm	process	technologies,	further	optimizing	our	products	and	process	technologies	while	meeting	the	yearly	market	cadence	for	product	introductions.

Advances	in	our	silicon	technology	have	enabled	us	to	continue	making	Moore's	Law	a	reality.	In	2014,	we	began	manufacturing	our	5th	generation	Intel Core	processor	family	using	our	14nm	process	technology.	In	2015,	we	released	a	new	microarchitecture	(our	6th	generation	Intel	Core	processor	family), using	our	14nm	process	technology.	We	also	plan	to	introduce	a	third	14nm	product,	code-named	"Kaby	Lake."	This	product	will	have	key	performance enhancements	as	compared	to	our	6th	generation	Intel	Core	processor	family.	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	expect	these	advances	will	result	in	a	significant	reduction	in	transistor	leakage,	lower	active	power,	and an	increase	in	transistor	density	to	enable	more	smaller	form	factors,	such	as	powerful,	feature-rich	phones	and	tablets	with	a	longer	battery	life.	For instance,	we	have	accelerated	the	Intel	Atom	processor-based	SoC	roadmap	for	our	mobile	form	factors	(including	tablets	and	phones),	notebooks (including	Ultrabook	devices	and	2	in	1	systems),	the	Internet	of	Things,	and	data	center	applications,	on	our	32nm,	22nm,	and	14nm	process technologies.	In	addition,	we	offer	the	Intel	Quark	SoC,	an	ultra-low-power	and	low-cost	architecture	designed	for	the	Internet	of	Things	such	as	industrial machines	and	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,	certain	of	which	were	amended	in	2014	to	further	define	the	commercial	terms	between	the	parties.	These	amended	agreements,	in	which	Intel agreed	to	provide	R&D	funding	over	five	years,	are	intended	to	accelerate	the	development	of	extreme	ultraviolet	(EUV)	lithography	projects	and	deep ultraviolet	immersion	lithography	projects,	including	generic	developments	applicable	to	both	300mm	and	450mm.

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	SoC	devices	to	enable	growth	in	mobile	form	factors.	In	addition,	we	continue	to make	significant	investments	in	communications	and	connectivity	for	tablets,	phones,	and	other	connected	devices,	including	multimode	LTE	modems. Our	investment	in	Cloudera,	Inc.	(Cloudera),	completed	in	2014,	is	evidence	of	our	drive	to	bring	big	data	analytics	to	the	mainstream	market	through	the joining	of	Cloudera's	software	platform	and	our	data	center	architecture	based	on	Intel	Xeon	processors.	We	also	continue	to	invest	in	leading-edge foundry	platforms	and	ecosystem	partner	development,	graphics,	high-performance	computing,	and	communication	and	connectivity.

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.	To	drive	innovation	and	gain efficiencies,	we	intend	to	utilize	our	investments	in	intellectual	property	and	R&D	across	our	market	segments.

# Employees

As	of	December	26,	2015,	we	had	107,300	employees	worldwide,	with	approximately	51%	of	those	employees	located	in	the	U.S.

# 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	program	that	allows	distributors	to	sell	our	microprocessors	and	other	products	in	small	quantities	to	customers of	systems	builders.	Our	microprocessors	and	other	products	are	also	available	in	direct	retail	outlets.

Hewlett-Packard	Company,	our	largest	customer	in	2014,	separated	into	HP	Inc.	and	Hewlett	Packard	Enterprise	Company	on	November	1,	2015.	In 2015,	these	entities	collectively	accounted	for	18%	of	our	net	revenue	(18%	in	2014	and	17%	in	2013),	Dell	Inc.	accounted	for	15%	of	our	net	revenue (16%	in	2014	and	15%	in	2013),	and	Lenovo	Group	Limited	accounted	for	 13%	of	our	net	revenue	(12%	in	2014	and	12%	in	2013).	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	26:	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	frequently	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.	Our	sales	are routinely	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	generally	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,	usually	30	days	after	shipment	or delivery.	We	assess	credit	risk	through	quantitative	and	qualitative	analysis.	From	this	analysis,	we	establish	shipping	and	credit	limits,	and	determine whether	we	will	seek	to	use	one	or	more	credit	support	protection	devices,	such	as	obtaining	a	parent	guarantee,	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.

Our	sales	to	distributors	are	typically	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.	Our	products	typically	have	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.	Customers	may 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	are	non-cancelable,	and	the	dollar	amount	associated	with	the	non-cancelable	portion	is	not	significant.

# Seasonal	Trends

Historically,	our	net	revenue	has	typically	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	global	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	Quark,	Intel	Atom,	Intel®	Celeron®,	Intel®	Pentium®,	Intel	Xeon,	Intel	Xeon	Phi,	and	Intel^® Itanium®	trademarks	make	up	our	processor	brands.

We	promote	brand	awareness	and	preference,	and	generate	demand	through	our	own	direct	marketing	as	well	as	through	co-marketing	programs.	Our direct	marketing	activities	primarily	include	advertising	through	digital	and	social	media	and	television,	as	well	as	consumer	and	trade	events,	industry	and consumer	communications,	and	press	relations.	We	market	to	consumer	and	business	audiences,	and	focus	on	building	awareness	and	generating demand	for	new	form	factors	such	as	tablets,	all-in-one	devices,	and	2	in	1	systems	powered	by	Intel.	Our	key	messaging	focuses	on	increased performance,	improved	energy	efficiency,	and	other	capabilities	such	as	connectivity,	communications,	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	customers	for marketing	activities	for	products	featuring	Intel®	brands,	subject	to	customers	meeting	defined	criteria.	These	marketing	activities	primarily	include advertising	through	digital	and	social	media	and	television,	as	well	as	press	relations.	We	have	also	entered	into	joint	marketing	arrangements	with	certain customers.

# Intellectual	Property	Rights	and	Licensing

Intel	owns	significant	intellectual	property	(IP)	and	related	IP	rights	around	the	world	that	relate	to	our	products,	services,	R&D,	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.	While	our	IP	rights	are	important	to	our	success,	our	business	as	a whole	is	not	significantly	dependent	on	any	single	patent,	copyright,	or	other	IP	right.	See	"Risk	Factors"	in	Part	I,	Item	1A,	and	"Note	25:	Contingencies" in	Part	II,	Item	8	of	this	Form	10-K.

We	have	obtained	patents	in	the	U.S.	and	other	countries.	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	R&D	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	environmental,	health,	and	safety	(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	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	U.S.	states	and	countries	in	Latin	America	and	Asia	also	have	or	are	developing	similar	e-waste take-back	laws.	Although	these	laws	are	typically	targeted	at	the	end	electronic	product	and	not	components	such	as	microprocessors,	the	inconsistency of	many	e-waste	take-back	laws,	changes	in	our	product	offerings,	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	DRC	and	adjoining countries.	In	2013,	we	accomplished	our	goal	to	manufacture	microprocessors	that	are	DRC	conflict-free	for	tantalum,	tin,	tungsten,	and	gold.	We	continue our	work	to	establish	DRC	conflict-free	supply	chains	for	our	company	and	our	industry,	and	are	moving	beyond	microprocessors	to	validate	our	broader product	base	as	DRC	conflict-free	in	2016	for	these	four	minerals.

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,	microarchitecture, macroarchitecture,	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	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	U.S.	Environmental	Protection	Agency	Green	Power	Partnership	rankings	for	the	past	eight 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	website	that	outline	our	performance	with	respect	to	corporate	responsibility, including	EHS	compliance.

We	use	our	Investor	Relations	website,	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	website	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	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	website	free	of	charge.	In addition,	our	Investor	Relations	website	allows	interested	persons	to	sign	up	to	automatically	receive	e-mail	alerts	when	we	post	financial	information.	The SEC's	website,	www.sec.gov,	contains	reports,	proxy	and	information	statements,	and	other	information	regarding	issuers	that	file	electronically	with	the SEC.	The	content	on	any	website	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

# Dr.	Venkata	S.M.	"Murthy"	Renduchintala,	age	50

•	2001	–	2007 Executive	VP;	Chief	Financial	and	Enterprise	Services Officer

•	Member	of	Intel	Corporation	Board	of	Directors

•	Member	of	Columbia	Sportswear	Company	Board	of	Directors

•	2012	–	present 	 Executive	VP;	Chief	Financial	Officer

•	Member	of	McKesson	Corporation	Board	of	Directors •	2010	–	2012 	 Senior	VP;	Chief	Financial	Officer

# ITEM	1A. RISK	FACTORS

The	following	risks	could	materially	and	adversely	affect	our	business,	financial	condition,	and	results	of	operations,	and	the	trading	price	of	our	common stock	could	decline.	These	risk	factors	do	not	identify	all	risks	that	we	face;	our	operations	could	also	be	affected	by	factors	that	are	not	presently	known to	us	or	that	we	currently	consider	to	be	immaterial	to	our	operations.	Due	to	risks	and	uncertainties,	known	and	unknown,	our	past	financial	results	may not	be	a	reliable	indicator	of	future	performance,	and	historical	trends	should	not	be	used	to	anticipate	results	or	trends	in	future	periods.	You	should	also refer	to	the	other	information	set	forth	in	this	Annual	Report	on	Form	10-K,	including	"Management's	Discussion	and	Analysis	of	Financial	Condition	and Results	of	Operations"	and	our	financial	statements	and	the	related	notes.

# Changes	in	product	demand	can	harm	our	results	of	operation	and	financial	condition.

Demand	for	our	products	is	variable	and	hard	to	predict.	 Changes	in	the	demand	for	our	products	may	reduce	our	revenue,	increase	our	costs,	lower	our gross	margin	percentage,	or	require	us	to	write	down	the	value	of	our	assets.	Important	factors	that	could	lead	to	variation	in	the	demand	for	our	products include	changes	in:

•business	conditions,	including	downturns	in	the	computing	industry,	or	in	the	global	or	regional	economies;

•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	our	customers'	inventories;

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

•customer	product	needs;

•market	acceptance	and	industry	support	of	our	new	and	maturing	products;	and

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

We	face	significant	competition.	The	industry	in	which	we	operate	is	highly	competitive	and	subject	to	rapid	technological	and	market	developments, changes	in	industry	standards,	changes	in	customer	needs,	and	frequent	product	introductions	and	improvements.	If	we	do	not	anticipate	and	respond	to these	developments,	our	competitive	position	may	weaken,	and	our	products	or	technologies	might	be	uncompetitive	or	obsolete.	In	recent	years,	our business	focus	has	expanded	and	now	includes	the	design	and	production	of	platforms	for	tablets,	phones,	and	other	devices	across	the	compute continuum,	including	products	for	the	Internet	of	Things,	and	related	services.	As	a	result,	we	face	new	sources	of	competition,	including,	in	certain	of these	market	segments,	from	incumbent	competitors	with	established	customer	bases	and	greater	brand	recognition.	To	be	successful,	we	need	to cultivate	new	industry	relationships	with	customers	and	partners	in	these	market	segments.	In	addition,	we	must	continually	improve	the	cost,	integration, and	energy	efficiency	of	our	products,	as	well	as	expand	our	software	capabilities	to	provide	customers	with	comprehensive	computing	solutions.	Despite our	ongoing	efforts,	there	is	no	guarantee	that	we	will	achieve	or	maintain	consumer	and	market	demand	or	acceptance	for	our	products	and	services	in these	various	market	segments.

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	and	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.

If	we	are	not	able	to	compete	effectively,	our	financial	results	will	be	adversely	affected,	including	increased	costs	and	reduced	revenue	and	gross	margin, and	we	may	be	required	to	accelerate	the	write-down	of	the	value	of	certain	assets.

Changes	in	the	mix	of	products	sold	may	harm	our	financial	results. Prices	differ	widely	among	the	platforms	we	offer	in	our	various	market	segments	due to	differences	in	features	offered	or	manufacturing	costs.	For	example,	product	offerings	range	from	lower-priced	and	entry-level	platforms,	such	as	those based	on	Intel	Quark	or	Intel	Atom	processors,	to	higher-end	platforms	based	on	Intel	Xeon	and	Intel	Itanium	processors.	If	demand	shifts	from	our higher-priced	to	lower-priced	platforms	in	any	of	our	market	segments,	our	gross	margin	and	revenue	would	decrease.	In	addition,	when	products	are introduced,	they	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.

# We	operate	globally	and	are	subject	to	significant	risks	in	many	jurisdictions.

Global	or	regional	conditions	may	harm	our	financial	results.	 We	have	manufacturing,	assembly	and	test,	R&D,	sales,	and	other	operations	in	many countries,	and	some	of	our	business	activities	may	be	concentrated	in	one	or	more	geographic	areas.	Moreover,	sales	outside	the	U.S.	accounted	for approximately	80%	of	our	revenue	for	the	fiscal	year	ended	 December	26,	2015.	As	a	result,	our	operations	and	our	financial	results,	including	our	ability to	manufacture,	assemble	and	test,	design,	develop,	or	sell	products,	may	be	adversely	affected	by	a	number	of	factors	outside	of	our	control,	including: •global	and	local	economic	conditions;

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

•natural	disasters,	public	health	issues,	and	other	catastrophic	events;

•inefficient	infrastructure	and	other	disruptions,	such	as	supply	chain	interruptions	and	large-scale	outages	or	unreliable	provision	of	services	from utilities,	transportation,	data	hosting,	or	telecommunications	providers;

•government	restrictions	on,	or	nationalization	of	our	operations	in	any	country,	or	restrictions	on	our	ability	to	repatriate	earnings	from	a	particular country;

•differing	employment	practices	and	labor	issues;

•formal	or	informal	imposition	of	new	or	revised	export	and/or	import	and	doing-business	regulations,	which	could	be	changed	without	notice;

•ineffective	legal	protection	of	our	IP	rights	in	certain	countries;	and

•local	business	and	cultural	factors	that	differ	from	our	normal	standards	and	practices.

We	are	subject	to	laws	and	regulations	worldwide,	which	may	differ	among	jurisdictions,	affecting	our	operations	in	areas	including,	but	not	limited	to:	IP ownership	and	infringement,	tax,	import	and	export	requirements,	anti-corruption,	foreign	exchange	controls	and	cash	repatriation	restrictions,	data privacy	requirements,	anti-competition,	advertising,	employment,	environment,	health,	and	safety.	Compliance	with	such	requirements	may	be	onerous and	expensive,	and	may	otherwise	impact	our	business	operations	negatively.	Although	we	have	policies,	controls,	and	procedures	designed	to	help ensure	compliance	with	applicable	laws,	there	can	be	no	assurance	that	our	employees,	contractors,	suppliers,	and/or	agents	will	not	violate	such	laws	or our	policies.	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.

We	may	be	affected	by	fluctuations	in	currency	exchange	rates.	 We	are	potentially	exposed	to	adverse	as	well	as	beneficial	movements	in	currency exchange	rates.	Although	most	of	our	sales	occur	in	U.S.	dollars,	expenses	may	be	paid	in	local	currencies.	An	increase	in	the	value	of	the	dollar	could increase	the	real	cost	to	our	customers	of	our	products	in	those	markets	outside	the	U.S.	where	we	sell	in	dollars,	and	a	weakened	dollar	could	increase the	cost	of	expenses	such	as	payroll,	utilities,	tax,	and	marketing	expenses,	as	well	as	overseas	capital	expenditures.	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.

Catastrophic	events	or	geopolitical	conditions	could	have	a	material	adverse	effect	on	our	operations	and	financial	results. Our	operations	or	systems could	be	disrupted	by	natural	disasters;	geopolitical	conditions;	terrorist	activity;	public	health	issues;	cybersecurity	incidents;	interruptions	of	service	from utilities,	transportation	or	telecommunications	providers;	or	other	catastrophic	events.	Such	events	could	make	it	difficult	or	impossible	to	manufacture	or deliver	products	to	our	customers,	receive	production	materials	from	our	suppliers,	or	perform	critical	functions,	which	could	adversely	affect	our	revenue and	require	significant	recovery	time	and	expenditures	to	resume	operations.	While	we	maintain	business	recovery	plans	that	are	intended	to	enable	us	to recover	from	natural	disasters	or	other	events	that	can	be	disruptive	to	our	business,	some	of	our	systems	are	not	fully	redundant	and	we	cannot	be	sure that	our	plans	will	fully	protect	us	from	all	such	disruptions.

We	maintain	a	program	of	insurance	coverage	for	a	variety	of	property,	casualty,	and	other	risks.	The	types	and	amounts	of	insurance	we	obtain	vary depending	on	availability,	cost,	and	decisions	with	respect	to	risk	retention.	Some	of	our	policies	have	large	deductibles	and	broad	exclusions.	In	addition, one	or	more	of	our	insurance	providers	may	be	unable	or	unwilling	to	pay	a	claim.	Losses	not	covered	by	insurance	may	be	large,	which	could	harm	our results	of	operations	and	financial	condition.

# We	operate	our	own	fabrication	facilities	and,	as	a	result,	are	vulnerable	to	manufacturing-related	risks.

Due	to	the	variability	in	demand	for	our	products,	we	may	be	unable	to	timely	respond	to	reduce	costs	when	demand	declines	or	to	increase	production when	demand	increases.	Our	operations	have	high	costs	that	are	either	fixed	or	difficult	to	reduce	in	the	short	term,	including	our	costs	related	to manufacturing,	such	as	facility	construction	and	equipment,	R&D,	and	the	employment	and	training	of	a	highly	skilled	workforce.	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.

Conversely,	if	product	demand	increases,	we	may	be	unable	to	add	capacity	fast	enough	to	meet	market	demand.	Our	revenue	and	gross	margin	can also	be	affected	by	the	timing	of	our	product	introductions	and	related	expenses,	including	marketing	expenses.

We	are	subject	to	risks	associated	with	the	development	and	implementation	of	new	manufacturing	process	technology.	 We	may	not	be	successful	or efficient	in	developing	or	implementing	new	production	processes.	Production	of	integrated	circuits	is	a	complex	process.	We	are	continually	engaged	in the	transition	from	our	existing	process	to	the	next-generation	process	technology.	This	consistent	innovation	involves	significant	expense	and	carries inherent	risks,	including	difficulties	in	designing	and	developing	next-generation	process	technologies,	development	and	production	timing	delays,	lower than	anticipated	manufacturing	yields,	and	product	defects	and	errata.	Disruptions	in	the	production	process	can	also	result	from	errors,	defects	in materials,	delays	in	obtaining	or	revising	operating	permits	and	licenses,	interruption	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.	Production	issues	can	lead	to	increased	costs	and	may	affect	our	ability	to	meet	product	demand,	which	could	adversely impact	our	business	and	the	results	from	operations.

We	face	supply	chain	risks.	Thousands	of	suppliers	provide	materials	that	we	use	in	production	and	other	aspects	of	our	business.	Where	possible,	we seek	to	have	several	sources	of	supply	for	all	of	those	materials.	However,	for	certain	materials,	we	may	rely	on	a	single	or	a	limited	number	of	suppliers, or	upon	suppliers	in	a	single	location.	In	addition,	consolidation	among	suppliers	could	impact	the	nature,	quality,	availability,	and	pricing	of	the	products and	services	available	to	us.	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.	The	unavailability	or	reduced	availability	of	materials	or	resources	may	require	us to	reduce	production	or	incur	additional	costs,	which	could	harm	our	business	and	results	of	operations.

We	also	rely	on	third-party	providers	to	manufacture	and	assemble	and	test	certain	components	or	products,	particularly	those	related	to	networking, mobile	and	communications,	and	NAND	flash	memory.	If	any	of	these	third	parties	are	unable	to	perform	these	services	on	a	timely	basis,	we	may encounter	supply	delays	or	disruptions	that	could	adversely	affect	our	financial	results.

In	addition,	there	are	regulatory	and	other	requirements,	restrictions,	and	requests	from	various	constituencies	regarding	sourcing	practices	and	supplier conduct,	with	a	trend	toward	expanding	the	scope	of	materials	and	locations	where	materials	originate,	regulating	supplier	behaviors,	and	increasing	the required	disclosures	regarding	such	matters	by	public	companies.	Increased	regulation	and	public	pressure	in	this	area	would	cause	our	compliance costs	to	increase	and	could	negatively	affect	our	reputation	given	that	we	use	many	materials	in	the	manufacturing	of	our	products	and	rely	on	many suppliers	to	provide	these	materials,	but	do	not	directly	control	their	procurement	or	employment	practices.

We	are	subject	to	the	risks	of	product	defects	and	errata.	 Product	defects	and	errata	(deviations	from	published	specifications)	may	result	from	problems in	our	product	design	or	our	manufacturing	and	assembly	and	test	processes.	Components	and	products	we	purchase	or	license	from	third-party	suppliers may	also	contain	defects.

Costs	from	defects	and	errata	could	include:

•writing	off	some	or	all	of	the	value	of	inventory;

•recalling	products	that	have	been	shipped;

•providing	product	replacements	or	modifications;	and

•defending	against	resulting	litigation.

These	costs	could	be	large	and	may	increase	expenses	and	lower	gross	margin,	and	result	in	delay	or	loss	of	revenue.	Any	product	defects,	errata,	or other	issues	that	we	do	not	detect	or	fix	could	also	damage	our	reputation,	negatively	affect	product	demand,	delay	product	releases,	or	result	in	legal liability.	The	announcement	of	product	defects	and	errata	could	cause	customers	to	purchase	products	from	competitors	as	a	result	of	possible	shortages of	our	components	or	for	other	reasons.	Any	of	these	occurrences	could	harm	our	business	and	financial	results.

We	are	subject	to	risks	associated	with	environmental	laws	and	regulations.	 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.	Our	ability	to	expand	or	modify	our	manufacturing	capability	in	the	future	may	be	impeded	by	environmental	regulations,	such	as	air quality	and	wastewater	requirements.	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.

Climate	change	may	also	pose	regulatory	and	environmental	risks	that	could	harm	our	results	of	operations	and	affect	the	way	we	conduct	business.	For example,	climate	change	regulation	could	result	in	increased	manufacturing	costs	associated	with	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	if,	for	example,	utility	companies	pass	on	their	costs	to	their	customers.	Furthermore,	many	of	our	operations	are	located	in	semi-arid	regions that	may	become	increasingly	vulnerable	to	prolonged	droughts	due	to	climate	change.	Our	fabrication	facilities	require	significant	water	use	and,	while we	recycle	and	reuse	a	portion	of	the	water	used,	we	may	have	difficulties	obtaining	sufficient	water	to	fulfill	our	operational	needs	due	the	lack	of available	infrastructure.

# We	are	subject	to	IP	risks	and	risks	associated	with	litigation	and	regulatory	proceedings.

We	may	be	unable	to	enforce	or	protect	our	IP	rights.	 We	regard	our	patents,	copyrights,	trade	secrets,	and	other	IP	rights	as	important	to	the	success	of our	business.	We	rely	on	IP	law	as	well	as	confidentiality	and	licensing	agreements	with	our	customers,	employees,	technology	development	partners, and	others	to	protect	our	IP	rights.	Our	ability	to	enforce	these	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	may	be	subject	to	claims	that	the	IP	rights	are	invalid,	not	enforceable,	or licensed	to	the	opposing	party.	Our	assertion	of	IP	rights	may	result	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	any	of	these	circumstances	may	harm our	competitive	position	and	business.	In	addition,	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;	as	a	result,	the	value	of	our	investment	in	R&D,	product development,	and	marketing	could	be	reduced.

Our	licenses	with	other	companies	and	participation	in	industry	initiatives	may	allow	competitors	to	use	our	patent	rights. Companies	in	our	industry	often bilaterally	license	patents	between	each	other	to	settle	disputes	or	as	part	of	business	agreements.	Our	competitors	may	have	licenses	to	our	patents, and	under	current	case	law,	some	of	the	licenses	may	exhaust	our	patent	rights	as	to	licensed	product	sales	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.

Third	parties	may	assert	claims	based	on	IP	rights	against	us	or	our	products,	which	could	harm	our	business. We	may	face	claims	based	on	IP	rights from	individuals	and	companies,	including	those	who	have	acquired	patent	portfolios	to	assert	claims	against	other	companies.	We	are	normally	engaged in	a	number	of	litigation	matters	involving	IP	rights.	Claims	that	our	products	or	processes	infringe	the	IP	rights	of	others,	whether	or	not	meritorious,	could cause	us	to	incur	large	costs	to	respond	to,	defend,	and	resolve,	and	they	may	divert	the	efforts	and	attention	of	management	and	technical	personnel.	In addition,	we	may	face	claims	based	on	the	theft	or	unauthorized	use	or	disclosure	of	third-party	trade	secrets	and	other	confidential	business	information or	end-user	data	that	we	obtain	in	conducting	our	business.	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.	Furthermore,	we	have	agreed	to	indemnify	customers	for	certain	IP	rights claims	against	them.	As	a	result	of	IP	rights	claims,	we	could:

•pay	monetary	damages,	including	payments	to	satisfy	indemnification	obligations;

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

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

•enter	into	settlement	and	license	agreements,	which	agreements	may	not	be	available	on	commercially	reasonable	terms.

These	IP	rights	claims	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	rely	on	access	to	third-party	IP,	which	may	not	be	available	to	us	on	commercially	reasonable	terms	or	at	all.	Many	of	our	products	include	third-party IP	and/or	implement	industry	standards,	which	may	require	licenses	from	third	parties.	Based	on	past	experience	and	industry	practice,	we	believe	such licenses	generally	can	be	obtained	on	commercially	reasonable	terms.	However,	there	is	no	assurance	that	the	necessary	licenses	can	be	obtained	on acceptable	terms	or	at	all.	Failure	to	obtain	the	right	to	use	third-party	IP,	or	to	use	such	IP	on	commercially	reasonable	terms,	could	preclude	us	from selling	certain	products	or	otherwise	have	a	material	adverse	impact	on	our	financial	condition	and	operating	results.

We	are	subject	to	the	risks	associated	with	litigation	and	regulatory	proceedings.	 We	may	face	legal	claims	or	regulatory	matters	involving	stockholder, consumer,	competition,	and	other	issues	on	a	global	basis.	As	described	in	"Note	25:	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	certain	products,	engaging	in	certain	business	practices,	or	requiring	other remedies,	such	as	compulsory	licensing	of	patents.	An	unfavorable	outcome	may	result	in	a	material	adverse	impact	on	our	business,	results	of operations,	financial	position,	and	overall	trends.	In	addition,	regardless	of	the	outcome,	litigation	can	be	costly,	time-consuming,	disruptive	to	our operations,	and	distracting	to	management.

# We	must	attract,	retain,	and	motivate	key	employees.

To	be	competitive,	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	can	be	intense.	To	help attract,	retain,	and	motivate	qualified	employees,	we	use	share-based	and	other	performance-based	incentive	awards	such	as	restricted	stock	units (RSUs)	and	cash	bonuses.	If	our	share-based	or	other	compensation	programs	cease	to	be	viewed	as	competitive	and	valuable	benefits,	our	ability	to attract,	retain,	and	motivate	employees	could	be	weakened,	which	could	harm	our	results	of	operations.

# We	are	subject	to	cybersecurity	and	privacy	risks.

Third	parties	attempt	to	gain	unauthorized	access	to	our	network,	products,	services,	and	infrastructure.	 We	regularly	face	attempts	by	others	to	gain unauthorized	access	through	the	Internet	or	to	introduce	malicious	software	to	our	information	technology	(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. Due	to	the	widespread	use	of	our	products	and	the	high	profile	of	our	commercial	security	products,	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.	From	time	to	time,	we	encounter	intrusions	or	unauthorized access	to	our	network,	products,	services,	or	infrastructure.	To	date,	none	have	resulted	in	any	material	adverse	impact	to	our	business	or	operations.	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.	While	we seek	to	detect	and	investigate	all	unauthorized	attempts	and	attacks	against	our	network,	products,	and	services,	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,	we	remain	potentially	vulnerable to	additional	known	or	unknown	threats.	Such	incidents,	whether	successful	or	unsuccessful,	could	result	in	our	incurring	significant	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.	In	addition,	these	threats	are constantly	evolving,	thereby	increasing	the	difficulty	of	successfully	defending	against	them	or	implementing	adequate	preventative	measures.	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	our	employees,	customers,	or	other	third	parties,	which	could	increase	our	expenses, damage	our	reputation,	or	result	in	legal	or	regulatory	proceedings.	The	theft,	loss,	or	misuse	of	personal	data	collected,	used,	stored,	or	transferred	by	us to	run	our	business	could	result	in	significantly	increased	security	costs	or	costs	related	to	defending	legal	claims.	Global	privacy	legislation,	enforcement, and	policy	activity	in	this	area	are	rapidly	expanding	and	creating	a	complex	regulatory	compliance	environment.	Costs	to	comply	with	and	implement these	privacy-related	and	data	protection	measures	could	be	significant.	In	addition,	even	our	inadvertent	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.

# We	are	subject	to	risks	associated	with	transactions.

We	invest	in	companies	for	strategic	reasons	and	may	not	realize	a	return	on	our	investments.	 We	make	investments	in	public	and	private	companies around	the	world	to	further	our	strategic	objectives	and	support	key	business	initiatives.	Many	of	the	instruments	in	which	we	invest	are	non-marketable	at the	time	of	our	initial	investment.	Companies	in	which	we	invest	range	from	early-stage	companies	still	defining	their	strategic	direction	to	mature companies	with	established	revenue	streams	and	business	models.	The	success	of	our	investment	in	any	company	is	typically	dependent	on	the availability	to	the	company	of	additional	funding	on	favorable	terms,	or	a	liquidity	event,	such	as	a	public	offering	or	acquisition.	If	any	of	the	companies	in which	we	invest	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.

Our	acquisitions,	divestitures,	and	other	transactions	could	fail	to	achieve	strategic	objectives,	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 acquisitions,	divestitures,	and	other	transactions,	such	as	joint	ventures.	Given	that	our	resources	are	limited,	our	decision	to	complete	an	acquisition	has opportunity	costs	and	we	may	need	to	forgo	the	prospect	of	acquiring	other	companies	or	technologies	that	could	help	us	achieve	our	strategic	objectives. In	addition	to	opportunity	costs,	these	transactions	involve	large	challenges	and	risks,	including	risks	that:

•the	transaction	may	not	advance	our	business	strategy;

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

•we	may	not	realize	a	satisfactory	return;

•we	may	experience	disruption	of	our	ongoing	operations;

•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;

•we	may	be	unable	to	retain	the	customers	and	partners	of	acquired	businesses;	and/or

•there	may	be	unknown,	underestimated,	and/or	undisclosed	commitments	or	liabilities.

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	additional	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.

# We	are	subject	to	sales-related	risks.

We	face	risks	related	to	sales	through	distributors	and	other	third	parties.	 We	sell	a	significant	portion	of	our	products	through	third	parties	such	as distributors,	value-added	resellers,	OEMs,	ODMs,	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	the	Foreign	Corrupt	Practices Act	or	similar	laws	by	distributors	or	other	third-party	intermediaries	could	have	a	material	impact	on	our	business.	Failure	to	manage	risks	related	to	our use	of	distributors	may	reduce	sales,	increase	expenses,	and	weaken	our	competitive	position.

We	face	risks	related	to	business	transactions	with	U.S.	government	entities.	 We	receive	proceeds	from	services	and	products	we	provide	to	the	U.S. government.	U.S.	government	demand	and	payment	may	be	affected	by	public	sector	budgetary	cycles	and	funding	authorizations.	U.S.	government contracts	are	subject	to	oversight,	including	special	rules	on	accounting,	IP	rights,	expenses,	reviews,	information	handling,	and	security.	Failure	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	U.S.	government	business.

# 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	reduce	our	net	income.

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	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	manufacturing	enterprises	and	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.

# We	may	have	fluctuations	in	the	amount	and	frequency	of	our	stock	repurchases.

The	amount,	timing,	and	execution	of	our	stock	repurchase	program	may	fluctuate	based	on	our	priorities	for	the	use	of	cash	for	other	purposes—such	as investing	in	our	business,	including	operational	spending,	capital	spending,	and	acquisitions,	and	returning	cash	to	our	stockholders	as	dividend	payments —and	because	of	changes	in	cash	flows	and	changes	in	tax	laws.

# Workforce	restructuring	actions	may	be	disruptive	to	our	operations	and	adversely	affect	our	financial	results.

In	response	to	the	business	environment	and	to	accomplish	our	strategic	objectives,	from	time	to	time	we	may	restructure	our	operations	or	make	other adjustments	to	our	workforce.	Such	workforce	changes	can	result	in	restructuring	charges	in	addition	to	those	described	in	"Note	13:	Restructuring	and Asset	Impairment	Charges"	in	Part	II,	Item	8	of	this	Form	10-K.	Such	workforce	changes	can	also	temporarily	reduce	workforce	productivity,	which	could be	disruptive	to	our	business	and	adversely	affect	our	results	of	operations.	In	addition,	we	may	not	achieve	or	sustain	the	expected	cost	savings	or	other benefits	of	our	restructuring	plans,	or	do	so	within	the	expected	time	frame.

# 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	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	resource	constraints	exist,	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	due	to	changes	in	conditions	or	deterioration	in	the	degree	of	compliance	with	policies	or	procedures.	If	our	controls	become inadequate,	we	could	fail	to	meet	our	financial	reporting	obligations,	our	reputation	may	be	adversely	affected,	our	business	and	operating	results	could	be harmed,	and	the	market	price	of	our	stock	could	decline.

# ITEM	1B. UNRESOLVED	STAFF	COMMENTS

# Not	applicable.

# ITEM	2. PROPERTIES

As	of	December	26,	2015,	our	major	facilities	consisted	of:

2	 Leases	expire	on	varying	dates	through	2030	and	generally	include	renewals	at	our	option.

Our	principal	executive	offices	are	located	in	the	U.S.	and	a	majority	of	our	wafer	fabrication	activities	are	also	located	in	the	U.S.	We	completed construction	of	development	fabrication	facilities	in	Oregon	during	2014	that	we	expect	will	enable	us	to	maintain	our	process	technology	lead.	We	also completed	construction	of	a	large-scale	fabrication	building	in	Arizona	in	2013.	A	portion	of	the	new	Oregon	and	Arizona	facilities	are	currently	not	in	use and	we	are	reserving	the	new	buildings	for	additional	capacity	and	future	technologies.	Incremental	construction	and	equipment	installation	are	required	to ready	the	facilities	for	their	intended	use.	Our	Massachusetts	fabrication	facility	was	our	last	manufacturing	facility	on	 200mm	wafers	and	ceased production	in	Q1	2015.	Outside	the	U.S.,	we	have	wafer	fabrication	facilities	in	Ireland,	Israel,	and	China.	 Our	fabrication	facility	in	Ireland	has	transitioned to	our	14nm	process	technology,	with	manufacturing	continuing	to	ramp	in	2016.	Additionally,	in	the	second	half	of	2016,	we	will	start	using	our	facility	in Dalian,	China	to	help	expand	our	manufacturing	capacity	in	next-generation	memory.	Our	assembly	and	test	facilities	are	located	in	 Malaysia,	China,	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	26:	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	25:	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	5,	2016,	there	were	approximately	130,000	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	2005,	and	subsequently	amended,	to	repurchase	up	to 	$65.0	billion	in shares	of	our	common	stock	in	open	market	or	negotiated	transactions.	As	of	December	26,	2015,	$9.4	billion	remained	available	for	repurchase	under the	existing	repurchase	authorization	limit.

Common	stock	repurchase	activity	under	our	stock	repurchase	plan	during	each	quarter	of 2015	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\t28,\t2014\t–\tMarch\t28,\t2015 | 21.3 | $35.14 | $11,643 |
| March\t29,\t2015\t–\tJune\t27,\t2015 | 23.6 | 31.83 | 10,893 |
| June\t28,\t2015\t–\tSeptember\t26,\t2015 | 34.8 | 28.78 | 9,892 |
| September\t27,\t2015\t–\tDecember\t26,\t2015 | 16.0 | 31.24 | $9,391 |
| Total | 95.7 | $31.36 |  |

Common	stock	repurchase	activity	under	our	stock	repurchase	plan	during	 Q4	2015	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\t27,\t2015\t–\tOctober\t24,\t2015 | 16.0 | $31.24 | $9,391 |
| October\t25,\t2015\t–\tNovember\t21,\t2015 | — | — | 9,391 |
| November\t22,\t2015\t–\tDecember\t26,\t2015 | — | — | $9,391 |
| Total | 16.0 | $31.24 |  |

In	our	consolidated	financial	statements,	we	treat	shares	of	common	stock	withheld	for	tax	purposes	on	behalf	of	our	employees	in	connection	with	the vesting	of	RSUs	as	common	stock	repurchases	because	they	reduce	the	number	of	shares	that	would	have	been	issued	upon	vesting.	These	withheld shares	of	common	stock	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	19:	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	shares	of	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	26,	2015.	The	graph	and	table	assume	that $100	was	invested	on	the	last	day	of	trading	for	the	fiscal	year	2010	in	each	of	our	shares	of	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	shares	of	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

|  | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Intel\tCorporation | $100 | $122 | $104 | $137 | $207 | $199 |
| Dow\tJones\tU.S.\tTechnology\tIndex | $100 | $100 | $110 | $141 | $175 | $179 |
| S&amp;P\t500\tIndex | $100 | $102 | $116 | $157 | $157 | $152 |

# ITEM	6. SELECTED	FINANCIAL	DATA

| Years	Ended<br>(Dollars	in	Millions,	Except	Per	Share	Amounts) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 | Dec	29,<br>2012 | Dec	31,<br>2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\trevenue | $55,355 | $55,870 | $52,708 | $53,341 | $53,999 |
| Gross\tmargin | $34,679 | $35,609 | $31,521 | $33,151 | $33,757 |
| Gross\tmargin\tpercentage | 62.6% | 63.7% | 59.8% | 62.1% | 62.5% |
| Research\tand\tdevelopment\t(R&amp;D) | $12,128 | $11,537 | $10,611 | $10,148 | $8,350 |
| Marketing,\tgeneral\tand\tadministrative\t(MG&amp;A) | $7,930 | $8,136 | $8,088 | $8,057 | $7,670 |
| R&amp;D\tand\tMG&amp;A\tas\tpercentage\tof\trevenue | 36.2% | 35.2% | 35.5% | 34.1% | 29.7% |
| Operating\tincome | $14,002 | $15,347 | $12,291 | $14,638 | $17,477 |
| Net\tincome | $11,420 | $11,704 | $9,620 | $11,005 | $12,942 |
| Effective\ttax\trate | 19.6% | 25.9% | 23.7% | 26.0% | 27.2% |
| Earnings\tper\tshare\tof\tcommon\tstock |  |  |  |  |  |
| Basic | $2.41 | $2.39 | $1.94 | $2.20 | $2.46 |
| Diluted | $2.33 | $2.31 | $1.89 | $2.13 | $2.39 |
| Weighted\taverage\tdiluted\tshares\tof\tcommon\tstock\noutstanding | 4,894 | 5,056 | 5,097 | 5,160 | 5,411 |
| Dividends\tper\tshare\tof\tcommon\tstock |  |  |  |  |  |
| Declared | $0.96 | $0.90 | $0.90 | $0.87 | $0.7824 |
| Paid | $0.96 | $0.90 | $0.90 | $0.87 | $0.7824 |
| Net\tcash\tprovided\tby\toperating\tactivities | $19,017 | $20,418 | $20,776 | $18,884 | $20,963 |
| Additions\tto\tproperty,\tplant\tand\tequipment | $7,326 | $10,105 | $10,711 | $11,027 | $10,764 |
| Repurchase\tof\tcommon\tstock | $3,001 | $10,792 | $2,147 | $4,765 | $14,133 |
| Payment\tof\tdividends\tto\tstockholders | $4,556 | $4,409 | $4,479 | $4,350 | $4,127 |

| (Dollars	in	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 | Dec	29,<br>2012 | Dec	31,<br>2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Property,\tplant\tand\tequipment,\tnet | $31,858 | $33,238 | $31,428 | $27,983 | $23,627 |
| Total\tassets | $103,065 | $91,900 | $92,297 | $84,285 | $71,083 |
| Debt | $22,670 | $13,655 | $13,385 | $13,382 | $7,295 |
| Temporary\tequity | $897 | $912 | $— | $— | $— |
| Stockholders'\tequity | $61,085 | $55,865 | $58,256 | $51,203 | $45,911 |
| Employees\t(in\tthousands) | 107.3 | 106.7 | 107.6 | 105.0 | 100.1 |

During	Q4	2015,	the	closing	stock	price	conversion	right	condition	of	the	2009	debentures	continues	to	be	met	and	the	debentures	will	be	convertible	at the	option	of	the	holders	during	Q1	2016.	The	excess	of	the	amount	of	cash	payable	if	converted	over	the	carrying	amount	of	the	2009	debentures	was classified	as	temporary	equity	on	our	consolidated	balance	sheet.	For	further	information,	see	"Note	15:	Borrowings"	in	Part	II,	Item	8	of	this	Form	10-K.

During	2013	and	2015,	management	approved	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.

# 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.	Analysis	of	our	financial	results	comparing	 2015	to	2014	and	comparing	2014	to	2013.

•Liquidity	and	Capital	Resources.	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	26,	2015,	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,"	"goals,"	"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	12,	2016,	except	for	our	acquisition	of	Altera	completed	on	December	28,	2015	as	discussed	in	" Note	8:	Acquisitions"	in Part	II,	Item	8	of	this	Form	10-K.

# 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\t26,\n2015 | Dec\t27,\n2014 | Change | Dec\t26,\n2015 | Dec\t27,\n2014 | Change |
| Net\trevenue | $14,914 | $14,721 | $193 | $55,355 | $55,870 | $(515) |
| Gross\tmargin | $9,590 | $9,621 | $(31) | $34,679 | $35,609 | $(930) |
| Gross\tmargin\tpercentage | 64.3% | 65.4% | (1.1)\tpts | 62.6% | 63.7% | (1.1)\tpts |
| Operating\tincome | $4,299 | $4,453 | $(154) | $14,002 | $15,347 | $(1,345) |
| Net\tincome | $3,613 | $3,661 | $(48) | $11,420 | $11,704 | $(284) |
| Diluted\tearnings\tper\tshare\tof\tcommon\tstock | $0.74 | $0.74 | $— | $2.33 | $2.31 | $0.02 |
| Effective\ttax\trate | 16.0% | 21.4% | (5.4)\tpts | 19.6% | 25.9% | (6.3)\tpts |

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

We	achieved	record	net	revenue	for	Q4	2015	of	$14.9	billion,	up	1%	from	Q4	2014.	We	continue	to	see	our	business	evolve	as	we	execute	on	our strategy	to	leverage	the	"Virtuous	Cycle	of	Growth"	with	higher	DCG	platform,	NSG,	and	IOTG	platform	revenue.	These	operating	segments	made	up nearly	40%	of	our	revenue	and	more	than	60%	of	our	operating	profit	for	full	year	2015.	DCG	and	IOTG	both	posted	record	net	revenue	for	the	quarter and	was	partially	offset	by	lower	CCG	platform	revenue.	We	continue	to	believe	that	the	worldwide	PC	supply	chain	is	healthy,	with	appropriate	levels	of inventory.

Gross	margin	of	64%	decreased	by	approximately	one	percentage	point	from	Q4	2014,	primarily	due	to	higher	platform	unit	costs	that	resulted	in	part from	a	higher	mix	of	14nm	platforms,	and	lower	platform	unit	sales.	These	decreases	were	partially	offset	by	higher	platform	average	selling	prices	and, to	a	lesser	extent,	lower	factory	start-up	costs.	Gross	margin	increased	approximately	two	percentage	points	compared	to	the	midpoint	of	the	Business Outlook	in	October	2015,	primarily	driven	by	lower	platform	unit	costs,	lower	factory	start-up	costs,	and	higher	platform	average	selling	prices.

For	full	year	2015,	our	net	revenue	of	 $55.4	billion	was	down	1%	from	2014,	operating	income	of	$14.0	billion,	was	down	9%	from	2014,	and	diluted earnings	per	share	of	$2.33	were	up	1%	from	2014.	CCG	net	revenue	was	down	8%	as	we	continued	to	see	weakness	in	the	macroeconomic environment	and,	in	particular,	the	PC	market	as	we	were	coming	off	of	a	strong	growth	rate	in	the	second	half	of	2014	with	the	Microsoft	Windows*	XP refresh.	We	continue	to	see	growth	in	DCG,	with	net	revenue	up	11%	and	platform	unit	sales	and	average	selling	prices	up	 8%	and	3%,	respectively.

Gross	margin	of	63%	was	down	approximately	one	point	from	2014,	driven	by	higher	platform	unit	costs	on	14nm	and	lower	platform	unit	sales.	These decreases	were	partially	offset	by	higher	platform	average	selling	prices,	primarily	driven	by	a	higher	mix	of	DCG	platforms	and	higher	average	selling prices	on	a	richer	mix	of	platforms	within	the	desktop	and	DCG	platforms.	To	a	lesser	extent,	the	decrease	in	gross	margin	was	also	partially	offset	by lower	factory	start-up	costs	on	14nm	as	well	as	lower	production	costs	on	14nm,	which	were	treated	as	a	period	charge	in	2014.	Operating	profit	was $14.0	billion	in	2015,	a	decrease	of	$1.3	billion	from	2014,	driven	by	lower	gross	margin	and	increased	investments	in	our	growth	market	segments	of	the data	center,	Internet	of	Things,	and	memory.	Our	operating	profit	decrease	was	partially	offset	by	lower	investment	in	the	PC	market	segment.	Our effective	tax	rate	for	2015	of	19.6%	decreased	6.3	points	from	 2014,	driven	by	one-time	items	and	our	decision	to	indefinitely	reinvest	certain	prior	years' non-U.S.	earnings.

The	cash	generation	from	our	business	remained	strong,	with	cash	from	operations	of	 $19.0	billion	in	2015.	During	2015,	we	purchased	$7.3	billion	of capital	assets,	down	$2.8	billion	from	2014.	This	change	was	primarily	driven	by	our	new	strategy	on	next-generation	process	technology	and manufacturing	efficiencies,	namely	that	we	extended	the	length	of	time	we	plan	to	use	the	14nm	process	technology	by	introducing	a	third	14nm	product, code-named	"Kaby	Lake."	This	product	will	have	key	performance	enhancements	as	compared	to	our	6th	generation	Intel	Core	processor	family.	We	also returned	cash	to	stockholders	by	both	paying	$4.6	billion	in	dividends	and	repurchasing	$3.0	billion	of	common	stock	through	our	stock	repurchase program.	We	ended	the	year	with	an	investment	portfolio	of	$25.3	billion,	up	approximately	$11.3	billion	from	a	year	ago.	That	investment	portfolio consisted	of	cash	and	cash	equivalents,	short-term	investments,	and	trading	assets.	We	issued	approximately	$9.5	billion	of	long-term	debt	to	finance	our Altera	acquisition.	For	further	information,	see	"Note	15:	Borrowings"	in	Part	II,	Item	8	of	this	Form	10-K.	Effective	in	Q1	2016,	our	annual	dividend increased	$0.08	to	$1.04	per	share	and	our	Board	of	Directors	declared	a	cash	dividend	of	$0.26	per	share	of	common	stock.

Early	in	Q1	2016,	we	completed	the	acquisition	of	Altera.	The	acquisition	will	couple	Intel's	leading-edge	products	and	manufacturing	process	with Altera's	leading	FPGA	technology.	The	combination	is	expected	to	enable	new	classes	of	products	that	meet	customer	needs	in	the	data	center	and Internet	of	Things	market	segments.	We	believe	our	product	offerings	and	architectures	will	continue	to	enable	innovation	and	growth	in	the	data	center and	the	Internet	of	Things	market	segments.	The	impact	of	the	Altera	acquisition	has	been	reflected	in	our	Business	Outlook	published	in	our	January 2016	earnings	release.	For	further	information,	see	"Note	8:	Acquisitions"	in	Part	II,	Item	8	of	this	Form	10-K.

Our	Business	Outlook	for	Q1	2016	and	full	year	2016	includes,	where	applicable,	our	current	expectations	for	revenue,	gross	margin	percentage, spending	(R&D	plus	MG&A),	and	capital	expenditures.	We	publish	our	Business	Outlook	in	our	quarterly	earnings	release.

Our	Business	Outlook	and	any	updates	thereto	are	publicly	available	on	our	Investor	Relations	website, 	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	18,	2016, unless	updated	earlier.	From	the	close	of	business	on	March	18,	2016	until	our	quarterly	earnings	release	is	published,	currently	scheduled	for	 April	19, 2016,	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	14,	2016,	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	determination	of	useful	lives	for	our	property,	plant	and	equipment	and	the	related	timing	of	when	depreciation	should	begin;

•the	valuation	and	allocation	of	assets	acquired	and	liabilities	assumed	in	connection	with	business	combinations;

•the	valuation	and	recoverability	of	long-lived	assets	(property,	plant	and	equipment;	identified	intangibles	and	goodwill),	which	impact	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	$4.5	billion	as	of	December	26,	2015	($3.2	billion	as	of	December	27,	2014).

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	impairment	and	disclosure	purposes;	however,	the investments	are	recorded	at	fair	value	only	if	an	impairment	is	recognized.	The	measurement	of	fair	value	requires	significant	judgment	and	includes	a qualitative	and	quantitative	analysis	of	events	or	circumstances	that	impact	the	fair	value	of	the	investment.	Qualitative	analysis	of	our	investments involves	understanding	each	investee's	revenue	and	earnings	trends	relative	to	pre-defined	milestones	and	overall	business	prospects;	the	technological feasibility	of	our	investee's	products	and	technologies;	the	general	market	conditions	in	the	investee's	industry	or	geographic	area,	including	adverse regulatory	or	economic	changes;	and	the	management	and	governance	structure	of	the	investee.	Quantitative	assessments	of	the	fair	value	of	our investments	are	developed	using	the	market	and	income	approaches.	The	market	approach	includes	the	use	of	financial	metrics	and	ratios	of	comparable public	companies,	such	as	revenue,	earnings,	comparable	performance	multiples,	recent	financing	rounds,	the	terms	of	investees'	issued	interests,	and the	level	of	marketability	of	the	investments.	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.

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	record	the	investment	at	fair	value	by	recognizing	an	impairment.	Impairments	of non-marketable	equity	investments	were	$166	million	in	2015	($140	million	in	2014	and	$112	million	in	2013).

# Property,	Plant	and	Equipment	Depreciation

Management	judgment	is	required	in	determining	the	estimated	economic	useful	lives	of	our	property,	plant	and	equipment,	which	can	materially	impact our	depreciation	expense.	Accordingly,	at	least	annually,	we	evaluate	the	period	over	which	we	expect	to	recover	the	economic	value	of	these	assets. During	the	assessment	performed	in	Q4	2015,	we	considered	factors	such	as	the	lengthening	of	the	process	technology	cadence	resulting	in	longer	node transitions	on	both	14nm	and	10nm	products.	With	those	longer	transitions,	we	added	a	third	product	to	our	14nm	roadmap.	We	have	also	increased	re- use	of	machinery	and	tools	across	each	generation	of	process	technology.	As	a	result,	we	determined	that	the	useful	lives	of	machinery	and	equipment	in our	wafer	fabrication	facilities	should	be	increased	from	four	to	five	years.	We	will	account	for	this	as	a	change	in	estimate	that	will	be	applied prospectively,	effective	in	Q1	2016.	This	change	in	depreciable	life	drives	approximately	$1.5	billion	in	lower	depreciation	expense	for 2016.	Approximately	half	of	this	benefit	will	increase	gross	margin	(impacting	both	unit	cost	and	start-up	costs),	approximately	one-fourth	will	decrease R&D	expenses,	and	the	remaining	one-fourth	will	result	in	lower	inventory	costs	and	ending	inventory	values.

As	part	of	our	long-range	capacity	planning,	construction	on	certain	facilities	is	on	hold,	and	the	facilities	are	 not	in	use.	These	facilities	are	being	held	in	a safe	state,	and	we	have	plans	to	place	them	into	service	at	a	future	date.	The	time	at	which	these	assets	are	placed	into	service	depends	on	our	existing manufacturing	capacity,	market	demand	for	specific	products,	and	where	we	are	in	the	transition	of	products	on	our	roadmap.	Management	is	required	to make	judgments	as	to	the	timing	of	when	these	facilities	will	be	readied	for	their	intended	use	and	placed	into	service	for	the	manufacturing	of	our products,	which	is	when	depreciation	begins.

# Business	Combinations

Accounting	for	acquisitions	requires	our	management	to	estimate	the	fair	value	of	the	assets	and	liabilities	acquired,	which	involves	a	number	of judgments,	assumptions,	and	estimates	that	could	materially	affect	the	timing	or	amounts	recognized	in	our	financial	statements.	The	items	involving	the most	significant	assumptions,	estimates,	and	judgments	include	determining	the	fair	value	of	the	following:

•Intangible	assets,	including	valuation	methodology,	estimations	of	future	cash	flows,	and	discount	rates,	as	well	as	the	estimated	useful	life	of	the intangible	assets;

•the	acquired	company's	brand,	as	well	as	assumptions	about	the	period	of	time	the	acquired	brand	will	continue	to	be	used;

•deferred	tax	assets	and	liabilities,	uncertain	tax	positions,	and	tax-related	valuation	allowances,	which	are	initially	estimated	as	of	the	acquisition	date;

•inventory;	property,	plant	and	equipment;	pre-existing	liabilities	or	legal	claims;	deferred	revenue;	and	contingent	consideration,	each	as	may	be applicable,	and

•goodwill	as	measured	as	the	excess	of	consideration	transferred	over	the	net	of	the	acquisition	date	fair	values	of	the	assets	acquired	and	the liabilities	assumed.

We	allocate	goodwill	and	intangible	assets	to	the	reporting	unit(s)	based	on	the	reporting	unit(s)	that	are	expected	to	benefit	from	the	business combination.	Upon	any	reorganization	of	our	operating	segments,	we	reevaluate	our	reporting	units	and,	if	necessary,	reassign	goodwill	using	a	relative fair	value	allocation	approach.

Our	assumptions	and	estimates	are	based	upon	comparable	market	data	and	information	obtained	from	our	management	and	the	management	of	the acquired	companies.	While	we	use	our	best	estimates	and	assumptions	to	accurately	value	assets	acquired	and	liabilities	assumed	at	the	acquisition date,	our	estimates	are	inherently	uncertain	and	subject	to	refinement.	As	a	result,	during	the	measurement	period,	which	may	be	up	to	one	year	following the	acquisition	date,	we	record	adjustments	to	the	assets	acquired	and	liabilities	assumed	with	the	corresponding	offset	to	goodwill.

# Long-Lived	Asset	Impairments

# 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	totaled	$151	million	in	2015	($115	million	in	2014	and $172	million	in	2013).

# 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	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	$7 million	in	2015	($36	million	in	2014	and	$17	million	in	2013).

# Goodwill

Goodwill	is	recorded	when	the	purchase	price	of	an	acquisition	exceeds	the	fair	value	of	the	net	tangible	and	identified	intangible	assets	acquired. Goodwill	is	allocated	to	our	reporting	units	based	on	the	relative	expected	fair	value	provided	by	the	acquisition.	Reporting	units	may	be	operating segments	as	a	whole	or	an	operation	one	level	below	an	operating	segment,	referred	to	as	a	component,	and	are	consistent	with	the	operating	segments identified	in	"Note	26:	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.	Additionally,	as	part	of	this assessment,	we	may	perform	a	quantitative	analysis	to	support	the	qualitative	factors	above	by	applying	sensitivities	to	assumptions	and	inputs	used	in measuring	a	reporting	unit's	fair	value.	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	reporting	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	assumptions	and	inputs:	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	2015,	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	completed	our	annual impairment	assessments	and	concluded	that	goodwill	was	not	impaired	in	any	of	these	years.

# 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	use	a	two-step	process	to	recognize	liabilities	for	uncertain	tax	positions.	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 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	life	cycle	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	insignificant in	2015	(insignificant	in	2014	and	$319	million	in	2013).

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.	Inventory	reserves increased	by	approximately	$185	million	in	2015	compared	to	2014.

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	loss	contingencies,	including	various	legal	and	regulatory	proceedings	and	asserted	and	potential	claims,	accruals	related	to	repair	or replacement	of	parts	in	connection	with	product	defects,	as	well	as	product	warranties	and	potential	asset	impairments	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.	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.

# Results	of	Operations

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

|  | December	26,	2015 |  | December	27,	2014 |  | December	28,	2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Years\tEnded\n(In\tMillions,\tExcept\tPer\tShare\tAmounts) | Dollars | %\tof\tNet\nRevenue | Dollars | %\tof\tNet\nRevenue | Dollars | %\tof\tNet\nRevenue |
| Net\trevenue | $55,355 | 100.0\t% | $55,870 | 100.0% | $52,708 | 100.0\t% |
| Cost\tof\tsales | 20,676 | 37.4\t% | 20,261 | 36.3% | 21,187 | 40.2\t% |
| Gross\tmargin | 34,679 | 62.6\t% | 35,609 | 63.7% | 31,521 | 59.8\t% |
| Research\tand\tdevelopment | 12,128 | 21.9\t% | 11,537 | 20.6% | 10,611 | 20.1\t% |
| Marketing,\tgeneral\tand\tadministrative | 7,930 | 14.3\t% | 8,136 | 14.6% | 8,088 | 15.3\t% |
| Restructuring\tand\tasset\timpairment\tcharges | 354 | 0.6\t% | 295 | 0.5% | 240 | 0.5\t% |
| Amortization\tof\tacquisition-related\tintangibles | 265 | 0.5\t% | 294 | 0.5% | 291 | 0.6\t% |
| Operating\tincome | 14,002 | 25.3\t% | 15,347 | 27.5% | 12,291 | 23.3\t% |
| Gains\t(losses)\ton\tequity\tinvestments,\tnet | 315 | 0.6\t% | 411 | 0.7% | 471 | 0.9\t% |
| Interest\tand\tother,\tnet | (105) | (0.2)% | 43 | 0.1% | (151) | (0.3)% |
| Income\tbefore\ttaxes | 14,212 | 25.7\t% | 15,801 | 28.3% | 12,611 | 23.9\t% |
| Provision\tfor\ttaxes | 2,792 | 5.1\t% | 4,097 | 7.4% | 2,991 | 5.6\t% |
| Net\tincome | $11,420 | 20.6\t% | $11,704 | 20.9% | $9,620 | 18.3\t% |
| Diluted\tearnings\tper\tshare\tof\tcommon\tstock | $2.33 |  | $2.31 |  | $1.89 |  |

Our	net	revenue	in	2015	decreased	by	$515	million,	or	1%,	compared	to	2014.	Platform	unit	sales	were	down	9%	due	to	challenging	macroeconomic conditions,	particularly	in	the	first	half	of	the	year,	and	higher	PC	demand	in	2014	driven	by	the	Microsoft	Windows	XP	refresh.	The	decrease	in	PC demand	was	partially	offset	by	higher	DCG	and	IOTG	platform	unit	sales.	The	decrease	in	revenue	was	partially	offset	by	higher	platform	average	selling prices,	which	were	up	8%,	as	we	benefited	from	a	higher	mix	of	DCG	platform	unit	sales	and	higher	average	selling	prices	on	desktop	and	DCG platforms.	To	a	lesser	extent,	the	decrease	in	revenue	was	partially	offset	by	higher	NSG	revenue.

Our	overall	gross	margin	percentage	was	 62.6%	in	2015,	down	from	63.7%	in	2014.	The	decrease	in	gross	margin	percentage	was	primarily	due	to	the gross	margin	decrease	in	the	CCG	operating	segment.	We	derived	a	substantial	majority	of	our	overall	gross	margin	dollars	for	 2015	and	2014	from	the sale	of	platforms	in	the	CCG	and	DCG	operating	segments.	Our	overall	gross	margin	dollars	in	2015	decreased	by	$930	million,	or	3%,	compared	to 2014.	The	following	results	drove	the	change	in	gross	margin	in	 2015	compared	to	2014	by	approximately	the	amounts	indicated:

# (In	Millions) 	 Gross	Margin	Reconciliation	(2015	compared	to	2014):

$(1,965) 	 Higher	platform	unit	costs,	primarily	driven	by	the	ramp	of	our	14nm	process	technology

400 Lower	factory	start-up	costs,	primarily	driven	by	the	ramp	of	our	14nm	process	technology

205 Lower	production	costs	primarily	on	our	14nm	products,	which	were	treated	as	period	charges	in	2014,	partially	offset	by	higher	pre- qualification	product	costs	on	14nm	products

Our	net	revenue	for	2014	was	up	$3.2	billion,	or	6%,	compared	to	2013.	Platform	unit	sales	were	up	19%,	primarily	driven	by	the	ramp	of	our	tablet platform	and	strength	in	the	traditional	PC	business.	To	a	lesser	extent,	higher	NSG	revenue	also	contributed	to	the	increase.	These	increases	were partially	offset	by	lower	platform	average	selling	prices,	which	were	down	10%	primarily	on	mix	shift	on	significantly	higher	tablet	and	phone	platform	unit sales	and	cash	consideration	associated	with	integrating	our	tablet	and	phone	platforms.	To	a	lesser	extent,	lower	CCG	phone	component	unit	sales partially	offset	the	increase	in	revenue.

Our	overall	gross	margin	percentage	was	 63.7%	in	 2014,	up	from	59.8%	in	2013.	The	increase	in	gross	margin	percentage	was	primarily	due	to	the gross	margin	increase	in	the	CCG	and	DCG	operating	segments.	We	derived	most	of	our	overall	gross	margin	dollars	for	2014	and	2013	from	the	sale	of platforms	in	the	CCG	and	DCG	operating	segments.	Our	overall	gross	margin	dollars	for	2014	increased	by	$4.1	billion,	or	13%,	compared	to	 2013.	The following	results	drove	the	change	in	gross	margin	in	2014	compared	to	2013	by	approximately	the	amounts	indicated:

1		Higher	gross	margin	from	platform	revenue	was	driven	by	higher	platform	unit	sales,	which	were	partially	offset	by	lower	platform	average	selling prices.	The	decrease	in	platform	average	selling	prices	was	due	to	a	shift	in	market	segment	mix	(higher	tablet	and	phone	platform	unit	sales	with higher	cash	consideration	to	our	customers	associated	with	integration	of	our	platform)	and	lower	notebook	platform	average	selling	prices.

# Client	Computing	Group

The	revenue	and	operating	income	for	the	CCG	operating	segment	for	 2015	and	2014	were	as	follows:

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Change | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Platform | $30,654 | $33,210 | $(2,556) | (8)% |
| Other | 1,565 | 1,662 | (97) | (6)% |
| Net\trevenue | $32,219 | $34,872 | $(2,653) | (8)% |
| Operating\tincome | $8,165 | $10,323 | $(2,158) | (21)% |
| CCG\tplatform\tunit\tsales |  |  |  | (11)% |
| CCG\tplatform\taverage\tselling\tprices |  |  |  | 4\t% |

Our	CCG	platform	unit	sales	decreased	in	2015	compared	to	2014	due	to	challenging	macroeconomic	conditions,	particularly	in	the	first	half	of	the	year, and	higher	PC	demand	in	2014	driven	by	the	Microsoft	Windows	XP	refresh.	Our	results,	as	compared	to	the	prior	year,	did	benefit	from	a	richer	mix	of high-performance	platforms.	Within	the	CCG	operating	segment,	the	following	results	drove	the	change	in	revenue	in	2015	compared	to	2014:

# (In	Millions) 	 Revenue	Reconciliation	(2015	compared	to	2014):

The	following	results	drove	the	change	in	CCG	operating	income	in	 2015	compared	to	2014	by	approximately	the	amounts	indicated:

# (In	Millions) 	 Operating	Income	Reconciliation	(2015	compared	to	2014):

435 Lower	factory	start-up	costs,	primarily	driven	by	the	ramp	of	our	14nm	process	technology

430 Lower	production	costs	primarily	on	our	14nm	products,	which	were	treated	as	a	period	charges	in	2014

375 Lower	operating	expense

1		Lower	gross	margin	from	lower	CCG	platform	revenue	was	driven	by	lower	CCG	platform	unit	sales,	partially	offset	by	higher	CCG	platform average	selling	prices.	CCG	platform	average	selling	prices	increased	due	to	higher	average	selling	prices	on	desktop,	notebook,	and	tablet platforms,	partially	offset	by	a	market	segment	mix	to	phone	platform	from	tablet	and	desktop	platforms.

| Years	Ended<br>(In	Millions) | Dec	27,<br>2014 | Dec	28,<br>2013 | Change | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Platform | $33,210 | $32,385 | $825 | 3\t% |
| Other | 1,662 | 2,260 | (598) | (26)% |
| Net\trevenue | $34,872 | $34,645 | $227 | 1\t% |
| Operating\tincome | $10,323 | $8,708 | $1,615 | 19\t% |
| CCG\tplatform\tunit\tsales |  |  |  | 20\t% |
| CCG\tplatform\taverage\tselling\tprices |  |  |  | (15)% |

Our	CCG	operating	segment	results	benefited	from	strength	in	the	traditional	PC	business	driven	by	the	Microsoft	Windows	XP	refresh.	Within	the	CCG operating	segment,	the	following	market	segment	results	drove	the	change	in	revenue	in	2014	compared	to	2013:

(345) Lower	phone	component	revenue

1		Lower	gross	margin	from	CCG	platform	revenue	was	driven	by	lower	CCG	platform	average	selling	prices,	partially	offset	by	higher	CCG	platform unit	sales.	Lower	CCG	platform	average	selling	prices	were	due	to	a	shift	in	market	segment	mix	(higher	tablet	and	phone	platform	unit	sales)	and lower	notebook	and	tablet	platform	average	selling	prices.

# Data	Center	Group

The	revenue	and	operating	income	for	the	DCG	operating	segment	for	 2015	and	2014	were	as	follows:

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Change | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Platform | $14,882 | $13,366 | $1,516 | 11% |
| Other | 1,095 | 1,021 | 74 | 7% |
| Net\trevenue | $15,977 | $14,387 | $1,590 | 11% |
| Operating\tincome | $7,844 | $7,390 | $454 | 6% |
| DCG\tplatform\tunit\tsales |  |  |  | 8% |
| DCG\tplatform\taverage\tselling\tprices |  |  |  | 3% |

Our	DCG	platform	revenue	increased	primarily	due	to	growth	in	the	Internet	cloud	computing	market	segment.	To	a	lesser	extent,	growth	in	the communications	infrastructure	market	segment	also	contributed	to	the	increase.	The	following	results	drove	the	change	in	DCG	revenue	in	2015 compared	to	2014:

The	following	results	drove	the	change	in	DCG	operating	income	in	 2015	compared	to	2014	by	approximately	the	amounts	indicated:

$1,415 	 Higher	DCG	platform	revenue

(725) 	 Higher	operating	expense,	primarily	driven	by	higher	shared	product	development	costs

| Years	Ended<br>(In	Millions) | Dec	27,<br>2014 | Dec	28,<br>2013 | Change | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Platform | $13,366 | $11,219 | $2,147 | 19% |
| Other | 1,021 | 944 | 77 | 8% |
| Net\trevenue | $14,387 | $12,163 | $2,224 | 18% |
| Operating\tincome | $7,390 | $5,456 | $1,934 | 35% |
| DCG\tplatform\tunit\tsales |  |  |  | 8% |
| DCG\tplatform\taverage\tselling\tprices |  |  |  | 10% |

Our	DCG	platform	revenue	continued	to	benefit	from	growth	in	the	cloud	and	technical	computing	market	segments,	with	continued	strengthening	of	the enterprise	market	segment.	The	following	results	drove	the	change	in	DCG	revenue	in	2014	compared	to	2013:

# Internet	of	Things	Group

The	revenue	and	operating	income	for	the	IOTG	operating	segment	for	 2015	and	2014	were	as	follows:

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Change | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Platform | $1,976 | $1,814 | $162 | 9\t% |
| Other | 322 | 328 | (6) | (2)% |
| Net\trevenue | $2,298 | $2,142 | $156 | 7\t% |
| Operating\tincome | $515 | $583 | $(68) | (12)% |

Net	revenue	for	the	IOTG	operating	segment	 increased	in	2015	compared	to	2014,	primarily	due	to	higher	IOTG	platform	unit	sales	based	on	strength	in the	retail	market	segment.	The	increase	was	partially	offset	by	lower	IOTG	platform	average	selling	prices.

Operating	income	for	the	IOTG	operating	segment	 decreased	in	2015	compared	to	2014,	driven	by	continued	investment	in	product	development	across our	operating	segments,	including	the	Internet	of	Things	market	segment.	This	decrease	was	partially	offset	by	lower	unit	costs	related	to	product transition	and	higher	IOTG	platform	revenue.

| Years	Ended<br>(In	Millions) | Dec	27,<br>2014 | Dec	28,<br>2013 | Change | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Platform | $1,814 | $1,485 | $329 | 22% |
| Other | 328 | 316 | 12 | 4% |
| Net\trevenue | $2,142 | $1,801 | $341 | 19% |
| Operating\tincome | $583 | $532 | $51 | 10% |

Net	revenue	for	the	IOTG	operating	segment	increased	by	$341	million,	or	19%,	in 2014	compared	to	2013.	The	increase	was	primarily	due	to	higher IOTG	platform	unit	sales	based	on	strength	in	the	retail	and	industrial	market	segments.

Operating	income	for	the	IOTG	operating	segment	increased	by	$51	million,	or	10%,	in 2014	compared	to	2013.	The	increase	was	primarily	due	to	higher IOTG	platform	revenue,	partially	offset	by	higher	IOTG	platform	operating	expenses.

# Software	and	Services	Operating	Segments

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Change | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Net\trevenue | $2,167 | $2,216 | $(49) | (2)% |
| Operating\tincome | $210 | $81 | $129 | 159\t% |

Operating	income	for	the	SSG	operating	segments	increased	in	2015	compared	to	2014,	driven	by	$132	million	of	lower	operating	expense.

The	revenue	and	operating	income	for	the	SSG	operating	segments	for	 2014	and	2013	were	as	follows:

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Research\tand\tdevelopment\t(R&amp;D) | $12,128 | $11,537 | $10,611 |
| Marketing,\tgeneral\tand\tadministrative\t(MG&amp;A) | $7,930 | $8,136 | $8,088 |
| R&amp;D\tand\tMG&amp;A\tas\tpercentage\tof\tnet\trevenue | 36% | 35% | 35% |
| Restructuring\tand\tasset\timpairment\tcharges | $354 | $295 | $240 |
| Amortization\tof\tacquisition-related\tintangibles | $265 | $294 | $291 |

R&D	spending	increased	by	$591	million,	or	5%,	in	2015	compared	to	2014.	The	increase	was	due	to	higher	investment	in	our	products—primarily	server, Internet	of	Things,	and	new	devices—as	well	as	expenses	of	newly	acquired	entities	and	higher	process	development	costs	for	our	10nm	process technology.	This	increase	was	partially	offset	by	lower	profit-dependent	compensation	and	savings	from	the	implementation	of	efficiencies	within	our	CCG operating	segment.

R&D	spending	increased	by	$926	million,	or	9%,	in	2014	compared	to	2013.	The	increase	was	due	to	higher	process	development	costs	for	our	10nm process	technology,	higher	compensation	expenses	for	both	profit-dependent	compensation	and	annual	salary	increases,	as	well	as	higher	investments	in our	products,	primarily	server	and	new	devices.	This	increase	was	partially	offset	by	lower	product	investments	in	our	phone,	tablet,	and	Intel	Media businesses.

# Marketing,	General	and	Administrative

MG&A	expenses	decreased	by	$206	million,	or	3%,	in	2015	compared	to	2014.	This	decrease	was	due	to	lower	profit-dependent	compensation	as	well as	lower	expenses	from	businesses	that	have	been	divested.	MG&A	expenses	increased	by	$48	million	in	2014	compared	to	2013.

# Restructuring	and	Asset	Impairment	Charges

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

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| 2015\trestructuring\tprogram | $264 | $— | $— |
| 2013\trestructuring\tprogram | 90 | 295 | 240 |
| Total\trestructuring\tand\tasset\timpairment\tcharges | $354 | $295 | $240 |

2015	Restructuring	Program.	Beginning	in	Q2	2015,	management	approved	and	commenced	implementation	of	restructuring	actions,	primarily	targeted workforce	reductions,	as	we	adjusted	resources	from	areas	of	disinvestment	to	areas	of	investment.	This	program	was	substantially	complete	by	the	end of	2015.

Restructuring	and	asset	impairment	charges	for	the	2015	restructuring	program	in	2015	were	as	follows:

Restructuring	and	asset	impairment	activities	for	the	2015	restructuring	program	in	2015	were	as	follows:

| (In	Millions) | Employee	Severance<br>and	Benefits | Asset	Impairments	and<br>Other | Total |
| :--- | :--- | :--- | :--- |
| Accrued\trestructuring\tbalance\tas\tof\tDecember\t27,\t2014 | $— | $— | $— |
| Additional\taccruals | 292 | 14 | 306 |
| Adjustments | (42) | — | (42) |
| Cash\tpayments | (225) | (1) | (226) |
| Non-cash\tsettlements | — | (6) | (6) |
| Accrued\trestructuring\tbalance\tas\tof\tDecember\t26,\t2015 | $25 | $7 | $32 |

We	recorded	the	additional	accruals	as	restructuring	and	asset	impairment	charges	in	the	consolidated	statements	of	income	and	within	the	"all	other" operating	segments	category.	A	substantial	majority	of	the	accrued	restructuring	balance	as	of	December	26,	2015	is	expected	to	be	paid	within	the	next 12	months,	and	was	recorded	as	a	current	liability	within	accrued	compensation	and	benefits	on	the	consolidated	balance	sheets.

Restructuring	actions	related	to	this	program	that	were	approved	in	2015	impacted	approximately 	4,000	employees.	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	 Q2	2015	and	expect	to	fully	realize	these	savings	after	the	actions	are	complete.

2013	Restructuring	Program.	Beginning	in	Q3	2013,	management	approved	and	commenced	implementation	of	several	restructuring	actions,	including targeted	workforce	reductions	and	the	exit	of	certain	businesses	and	facilities.	These	actions	include	the	wind	down	of	our	200mm	wafer	fabrication facility	in	Massachusetts,	which	ceased	production	in	Q1	2015,	and	the	closure	of	our	assembly	and	test	facility	in	Costa	Rica,	which	ceased	production	in Q4	2014.	These	targeted	reductions	will	enable	us	to	better	align	our	resources	in	areas	providing	the	greatest	benefit	in	the	current	business environment.	This	program	was	substantially	complete	by	the	end	of	2015.

Restructuring	and	asset	impairment	charges	for	the	2013	restructuring	program	for	each	period	were	as	follows:

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Employee\tseverance\tand\tbenefit\tarrangements | $82 | $265 | $201 |
| Asset\timpairments\tand\tother\trestructuring\tcharges | 8 | 30 | 39 |
| Total\trestructuring\tand\tasset\timpairment\tcharges | $90 | $295 | $240 |

Restructuring	and	asset	impairment	activities	for	the	2013	restructuring	program	for	each	period	were	as	follows:

| (In	Millions) | Employee	Severance<br>and	Benefits | Asset	Impairments	and<br>Other | Total |
| :--- | :--- | :--- | :--- |
| Accrued\trestructuring\tbalance\tas\tof\tDecember\t28,\t2013 | $183 | $— | $183 |
| Additional\taccruals | 252 | 31 | 283 |
| Adjustments | 13 | (1) | 12 |
| Cash\tpayments | (327) | (6) | (333) |
| Non-cash\tsettlements | — | (13) | (13) |
| Accrued\trestructuring\tbalance\tas\tof\tDecember\t27,\t2014 | 121 | 11 | 132 |
| Additional\taccruals | 101 | 9 | 110 |
| Adjustments | (19) | (1) | (20) |
| Cash\tpayments | (171) | (10) | (181) |
| Non-cash\tsettlements | — | (3) | (3) |
| Accrued\trestructuring\tbalance\tas\tof\tDecember\t26,\t2015 | $32 | $6 | $38 |

We	recorded	the	additional	accruals	and	adjustments	as	restructuring	and	asset	impairment	charges	in	the	consolidated	statements	of	income	and	within the	"all	other"	operating	segments	category.	Substantially	all	of	the	accrued	restructuring	balance	as	of	December	26,	2015	is	expected	to	be	paid	within the	next	12	months,	and	was	recorded	as	a	current	liability	within	accrued	compensation	and	benefits	on	the	consolidated	balance	sheets.

Restructuring	actions	related	to	this	program	that	were	approved	in	 2015	impacted	approximately	940	employees.	Since	Q3	2013,	we	have	incurred	a total	of	$625	million	in	restructuring	and	asset	impairment	charges.	These	charges	include	 $548	million	related	to	employee	severance	and	benefit arrangements	for	approximately	8,500	employees,	and	$77	million	in	asset	impairment	charges	and	other	restructuring	charges.

We	estimate	that	employee	severance	and	benefit	charges	to	date	will	result	in	gross	annual	savings	of	approximately	 $600	million,	which	will	be	realized within	R&D,	MG&A,	and	cost	of	sales.	We	began	to	realize	these	savings	in	 Q4	2013	and	expect	to	fully	realize	these	savings	after	the	actions	are complete.

# Share-Based	Compensation

Share-based	compensation	totaled	$1.3	billion	in	2015	($1.1	billion	in	2014	and	$1.1	billion	in	2013).	Share-based	compensation	was	included	in	cost	of sales	and	operating	expenses.

As	of	December	26,	2015,	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 |
| :--- | :--- | :--- |
| Restricted\tstock\tunits | $1,789 | 1.2\tyears |
| Stock\toptions | $13 | 8\tmonths |
| Stock\tPurchase\tPlan | $14 | 2\tmonths |

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

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

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Gains\t(losses)\ton\tequity\tinvestments,\tnet | $315 | $411 | $471 |
| Interest\tand\tother,\tnet | $(105) | $43 | $(151) |

We	recognized	lower	net	gains	on	equity	investments	in	2015	compared	to	2014	due	to	lower	gains	on	sales	of	equity	investments,	partially	offset	by higher	gains	on	third-party	merger	transactions.

We	recognized	lower	net	gains	on	equity	investments	in	2014	compared	to	2013	due	to	lower	gains	on	sales	of	equity	investments,	partially	offset	by higher	gains	on	third-party	merger	transactions.	The	majority	of	gains	on	sales,	net	for	2014	resulted	from	gains	on	private	equity	sales.	Net	gains	on equity	investments	for	2013	included	gains	of	$439	million	on	the	sales	of	our	interest	in	Clearwire	Communications,	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.

We	recognized	an	interest	and	other	net	loss	in	2015	compared	to	a	net	gain	in	2014	primarily	due	to	higher	interest	expense,	which	includes	the 2015 issuances	of	our	$9.5	billion	aggregate	principal	amount	of	senior	unsecured	notes.	For	further	information	on	these	transactions,	see	" Note	15: Borrowings"	in	Part	II,	Item	8	of	this	Form	10-K.

We	recognized	an	interest	and	other	net	gain	in	2014	compared	to	a	net	loss	in	2013	due	to	a	gain	recognized	on	the	divestiture	of	our	Intel	Media	assets in	2014.

# Provision	for	Taxes

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

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Income\tbefore\ttaxes | $14,212 | $15,801 | $12,611 |
| Provision\tfor\ttaxes | $2,792 | $4,097 | $2,991 |
| Effective\ttax\trate | 19.6% | 25.9% | 23.7% |

Most	of	the	decrease	in	our	effective	tax	rate	in	2015	compared	to	2014	was	driven	by	one-time	items,	a	higher	proportion	of	our	income	from	lower	tax jurisdictions,	and	our	decision	to	indefinitely	reinvest	certain	prior	years'	non-U.S.	earnings	positively	impacted	our	effective	income	tax	rate.

A	substantial	majority	of	the	increase	in	our	effective	tax	rate	between	 2014	and	2013	was	driven	by	the	reenacted	U.S.	R&D	tax	credit	in	2013	containing two	years'	worth	of	R&D	tax	credits.	The	U.S.	R&D	tax	credit	was	reenacted	in	Q4	2014	retroactive	for	the	full	year.	It	was	also	reenacted	in	Q1	2013 retroactive	to	the	beginning	of	2012.

# Liquidity	and	Capital	Resources

| (Dollars	in	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- |
| Cash\tand\tcash\tequivalents,\tshort-term\tinvestments,\tand\ttrading\tassets | $25,313 | $14,054 |
| Other\tlong-term\tinvestments | $1,891 | $2,023 |
| Loans\treceivable\tand\tother | $1,170 | $1,335 |
| Reverse\trepurchase\tagreements\twith\toriginal\tmaturities\tgreater\tthan\tapproximately\tthree\tmonths | $1,000 | $450 |
| Unsettled\ttrade\tliabilities\tand\tother | $99 | $77 |
| Short-term\tand\tlong-term\tdebt | $22,670 | $13,655 |
| Temporary\tequity | $897 | $912 |
| Debt\tas\tpercentage\tof\tpermanent\tstockholders'\tequity | 37.1% | 24.4% |

# Sources	and	Uses	of	Cash

(In	Millions)

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

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby\toperating\tactivities | $19,017 | $20,418 | $20,776 |
| Net\tcash\tused\tfor\tinvesting\tactivities | (8,183) | (9,905) | (18,073) |
| Net\tcash\tprovided\tby\t(used\tfor)\tfinancing\tactivities | 1,912 | (13,611) | (5,498) |
| Effect\tof\texchange\trate\tfluctuations\ton\tcash\tand\tcash\tequivalents | 1 | (15) | (9) |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | $12,747 | $(3,113) | $(2,804) |

# Operating	Activities

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

For	2015	compared	to	2014,	the	$1.4	billion	decrease	in	cash	provided	by	operating	activities	was	due	to	changes	in	working	capital,	adjustments	for	non- cash	items,	and	lower	net	income.	The	adjustments	for	non-cash	items	were	lower	due	primarily	to	deferred	taxes,	partially	offset	by	higher	depreciation. Income	taxes	paid,	net	of	refunds,	in	2015	compared	to	2014	were	$1.2	billion	lower	due	to	lower	income	before	taxes	in	2015.

Changes	in	assets	and	liabilities	as	of	 December	26,	2015	compared	to	December	27,	2014	included	a	decrease	in	accrued	compensation	and	benefits. This	decrease	was	due	to	higher	profit-dependent	compensation	in	2014	that	was	paid	out	in	2015,	and	an	increase	in	inventories	due	primarily	to	the ramp	of	our	6th	generation	Intel	Core	processor	family	of	products,	partially	offset	by	the	timing	of	certain	tax	benefits	that	reduced	our	income	taxes payable	position	in	2015.

For	2014	compared	to	2013,	the	$358	million	decrease	in	cash	provided	by	operating	activities	was	due	to	changes	in	working	capital,	partially	offset	by higher	net	income	and	adjustment	for	non-cash	items.

# Investing	Activities

Investing	cash	flows	consist	primarily	of	capital	expenditures;	investment	purchases,	sales,	maturities,	and	disposals;	and	proceeds	from	divestitures	and cash	used	for	acquisitions.	Our	capital	expenditures	were	$7.3	billion	in	2015	($10.1	billion	in	2014	and	$10.7	billion	in	2013).

The	decrease	in	cash	used	for	investing	activities	in	2015	compared	to	2014	was	primarily	due	to	net	trading	assets	activity	(which	was	a	source	of	cash in	2015	compared	to	a	use	of	cash	in	 2014)	and	lower	capital	expenditures.	This	activity	was	partially	offset	by	net	available-for-sale	activity	(which	was cash	flow	neutral	in	2015	compared	to	a	source	of	cash	in	2014)	and	higher	investments	in	non-marketable	equity	investments.

The	decrease	in	cash	used	for	investing	activities	in	2014	compared	to	2013	was	primarily	due	to	net	available-for-sale	activity	(which	was	a	source	of cash	in	2014	compared	to	a	use	of	cash	in	 2013)	and	a	decrease	in	cash	used	for	net	trading	assets	activity.	This	activity	was	partially	offset	by	an increase	in	investments	in	non-marketable	equity	investments.

# Financing	Activities

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

Cash	was	provided	by	financing	activities	in	 2015	compared	to	cash	used	by	financing	activities	in	 2014,	primarily	due	to	the	issuance	of	 $9.5	billion	of long-term	debt	and	fewer	repurchases	of	common	stock	under	our	authorized	stock	repurchase	program,	partially	offset	by	lower	proceeds	from	the	sales of	common	stock	through	employee	equity	incentive	plans	and	repayments	of	short-term	debt	compared	to	borrowings	in	2014.	We	have	an	ongoing authorization,	originally	approved	by	our	Board	of	Directors	in	2005,	and	subsequently	amended,	to	repurchase	up	to	$65.0	billion	in	shares	of	our common	stock	in	the	open	market	or	negotiated	transactions.	During	2015,	we	repurchased	$3.0	billion	of	common	stock	under	our	authorized	common stock	repurchase	program,	compared	to	$10.8	billion	in	2014.	As	of	December	26,	2015,	$9.4	billion	remained	available	for	repurchasing	common	stock 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	common	stock	through	employee	equity	incentive	plans	totaled	$866	million	in	2015	compared	to	$1.7	billion	in 2014.	Our	total	dividend	payments	were	 $4.6	billion	in	2015	compared	to	$4.4	billion	in	2014.	We	have	paid	a	cash	dividend	in	each	of	the	past	 93 quarters.	In	January	2016,	our	Board	of	Directors	declared	a	cash	dividend	of	 $0.26	per	share	of	common	stock	for	Q1	2016.	The	dividend	is	payable	on March	1,	2016	to	stockholders	of	record	on	February	7,	2016.

The	increase	in	cash	used	for	financing	activities	in	2014	compared	to	2013	was	primarily	due	to	an	increase	in	repurchases	of	common	stock	under	our authorized	stock	repurchase	program,	partially	offset	by	the	issuance	of	short-term	debt	in	2014.

# 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	26,	2015,	cash	and	cash	equivalents,	short-term	investments,	and	trading	assets	totaled	 $25.3	billion	($14.1	billion as	of	December	27,	2014).	The	increased	balance	compared	to	December	27,	2014	was	primarily	related	to	the	accumulation	of	cash	consideration required	for	our	acquisition	of	Altera,	which	closed	on	December	28,	2015,	subsequent	to	our	fiscal	2015	year-end.	In	addition	to	the	$25.3	billion,	we have	$1.9	billion	of	other	long-term	investments,	 $1.2	billion	of	loans	receivable	and	other,	and	 $1.0	billion	of	reverse	repurchase	agreements	with	original maturities	greater	than	approximately	three	months	that	we	include	when	assessing	our	sources	of	liquidity.	Substantially	all	of	our	investments	in	debt instruments	are	in	A/A2	or	better	rated	issuances,	and	a	substantial	majority	of	the	issuances	are	rated	 AA-/Aa3	or	better.

Other	potential	sources	of	liquidity	include	our	commercial	paper	program	and	our	automatic	shelf	registration	statement	on	file	with	the	SEC,	pursuant	to which	we	may	offer	an	unspecified	amount	of	debt,	equity,	and	other	securities.	Under	our	commercial	paper	program,	we	have	an	ongoing	authorization from	our	Board	of	Directors	to	borrow	up	to	$5.0	billion,	which	increased	in	2015	from	$3.0	billion.	Maximum	borrowings	under	our	commercial	paper program	were	$900	million	during	2015,	and	no	commercial	paper	remained	outstanding	as	of	December	26,	2015.	Our	commercial	paper	was	rated	 A- 1+	by	Standard	&	Poor's	and	 P-1	by	Moody's	as	of	December	26,	2015.	On	December	21,	2015,	we	entered	into	a	short-term	credit	facility	to	borrow	up to	$5.0	billion	to	facilitate	the	settlement	of	our	acquisition	of	Altera.	No	borrowings	were	outstanding	under	this	credit	facility	as	of	 December	26,	2015	and it	was	closed	in	January	2016.	In	2015,	we	issued	$9.5	billion	aggregate	principal	amount	of	senior	unsecured	notes.	These	notes	were	issued	primarily	to fund	a	portion	of	the	cash	consideration	for	our	pending	acquisition	of	Altera	and	for	general	corporate	purposes,	which	may	include	the	refinancing	of existing	indebtedness.	For	further	information	on	the	terms	of	the	notes,	see	"Note	15:	Borrowings"	in	Part	II,	Item	8	of	this	Form	10-K.

As	of	December	26,	2015,	$11.1	billion	of	our	$25.3	billion	of	cash	and	cash	equivalents,	short-term	investments,	and	trading	assets	was	held	by	our	non- U.S.	subsidiaries.	Of	the	$11.1	billion	held	by	our	non-U.S.	subsidiaries,	approximately	 $2.6	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	26,	2015.	The	remaining	amount	of non-U.S.	cash	and	cash	equivalents,	short-term	investments,	and	trading	assets	has	been	indefinitely	reinvested	and,	therefore,	no	U.S.	current	or deferred	taxes	have	been	accrued.	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.

During	2015,	we	entered	into	a	definitive	agreement	to	acquire	Altera	in	an	all-cash	transaction.	The	transaction	closed	on	December	28,	2015, subsequent	to	our	fiscal	2015	year-end.	As	of	the	date	we	entered	into	the	agreement,	the	transaction	had	an	approximate	value	of	$16.7	billion.	We financed	a	portion	of	the	acquisition	by	issuing	$9.5	billion	in	long-term	debt	during	2015	and	borrowing	 $4.0	billion	against	our	short-term	credit	facility	in the	first	quarter	of	2016.	We	funded	the	remainder	of	the	acquisition	with	issuances	of	commercial	paper	and	existing	cash	and	investments.	For information	on	our	indebtedness,	see	"Note	15:	Borrowings"	in	Part	II,	Item	8	of	this	Form	10-K.

We	believe	that	we	have	sufficient	financial	resources	to	meet	our	business	requirements	in	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"	and	"Note	4:	Fair	Value"	in	Part	II,	Item	8	of	this	Form	10-K.

# Marketable	Debt	Instruments

As	of	December	26,	2015,	our	assets	measured	and	recorded	at	fair	value	on	a	recurring	basis	included $23.4	billion	of	marketable	debt	instruments.	Of these	instruments,	$13.2	billion	was	classified	as	Level	1,	$10.0	billion	as	Level	2,	and	 $118	million	as	Level	3.

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

Of	the	$10.0	billion	of	marketable	debt	instruments	measured	and	recorded	at	fair	value	on	a	recurring	basis	and	classified	as	Level	2,	approximately 50% was	classified	as	Level	2	due	to	the	use	of	a	discounted	cash	flow	model	performed	by	us,	and	approximately	50%	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	help	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	26,	2015,	our	assets	measured	and	recorded	at	fair	value	on	a	recurring	basis	included	 $479	million	of	loans	receivable	and	$2.4	billion 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	26,	2015,	our	assets	measured	and	recorded	at	fair	value	on	a	recurring	basis	included	 $6.0	billion	of	marketable	equity	securities. Substantially	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

Significant	contractual	obligations	as	of	 December	26,	2015	were	as	follows:

|  |  | Less	Than |  |  | More	Than |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Total | 1\tYear | 1–3\tYears | 3–5\tYears | 5\tYears |
| Operating\tlease\tobligations | $1,200 | $234 | $376 | $264 | $326 |
| Capital\tpurchase\tobligations1 | 5,746 | 4,250 | 1,496 | — | — |
| Other\tpurchase\tobligations\tand\tcommitments2 | 3,966 | 1,784 | 1,986 | 196 | — |
| Long-term\tdebt\tobligations3 | 38,120 | 2,299 | 4,499 | 3,383 | 27,939 |
| Other\tlong-term\tliabilities4,\t5 | 1,263 | 788 | 214 | 105 | 156 |
| Total6 | $50,295 | $9,355 | $8,571 | $3,948 | $28,421 |

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	26,	2015,	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.	Debt	obligations	are	classified	based	on	their	stated	maturity	date,	regardless	of	their	classification	on the	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,	 $114	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	$68	million	to	be	made	during	2016	are	also	included;	however,	funding	projections	beyond	 2016	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.

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.

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	have	been	excluded	from	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	have	been	excluded	from	the	preceding	table.	These	obligations include	milestone-based	co-marketing	agreements,	contingent	funding	or	payment	obligations,	and	milestone-based	equity	investment	funding.	These arrangements	are	not	considered	contractual	obligations	until	the	milestone	is	met	by	the	counterparty.	As	of	December	26,	2015,	assuming	that	all	future milestones	are	met,	excluding	the	ASML	milestones	mentioned	below,	the	additional	required	payments	would	be	approximately	$827	million.	During 2012,	we	entered	into	a	series	of	agreements	with	ASML	intended	to	accelerate	the	development	of	EUV	lithography,	certain	of	which	were	amended	in 2014.	Under	the	amended	agreements,	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 €367 million,	or	$403	million,	as	of	December	26,	2015.	As	our	obligation	is	contingent	upon	ASML	achieving	certain	milestones,	we	have	excluded	this obligation	from	the	preceding	table.

For	the	majority	of	RSUs	granted,	the	number	of	shares	of	common	stock	issued	on	the	date	the	RSUs	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 excluded	from	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.

During	2014,	we	entered	into	a	series	of	agreements	with	Tsinghua	Unigroup	Ltd.	(Tsinghua	Unigroup),	an	operating	subsidiary	of	Tsinghua	Holdings	Co. Ltd.,	to,	among	other	things,	jointly	develop	Intel	architecture-	and	communications-based	solutions	for	phones.	Subject	to	regulatory	approvals	and	other closing	conditions,	we	have	also	agreed	to	invest	up	to	9.0	billion	Chinese	yuan	(approximately	$1.5	billion	as	of	the	date	of	the	agreement)	for	a	minority stake	of	approximately	20%	of	UniSpreadtrum.	During	2015,	we	invested	$966	million	to	complete	the	first	phase	of	the	equity	investment.	The	second phase	of	the	investment	will	require	additional	funding	of	approximately	$500	million;	however,	as	our	obligation	is	contingent	upon	regulatory	approvals and	other	closing	conditions,	it	has	been	excluded	from	the	preceding	table.

# Off-Balance-Sheet	Arrangements

As	of	December	26,	2015,	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	currency	exchange	rates,	interest	rates,	and	equity	prices.	All	of	the	following	potential	changes	are	based	on	sensitivity analyses	performed	on	our	financial	positions	as	of	December	26,	2015,	and	December	27,	2014.	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	gains and	losses	on	the	related	hedging	instruments.

Substantially	all	of	our	revenue	is	transacted	in	U.S.	dollars.	However,	a	 significant	portion	of	our	operating	expenditures	and	capital	purchases	are incurred	in	or	exposed	to	other	currencies,	primarily	the	euro,	the	Chinese	yuan,	the	Japanese	yen,	and	the	Israeli	shekel .	We	have	established	balance sheet	and	forecasted	transaction	currency	risk	management	programs	to	protect	against	fluctuations	in	the	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	$75	million	as	of	December	26,	2015	(less	than	$50	million	as	of	December	27,	2014).

# Interest	Rates

We	generally	hedge	interest	rate	risks	of	fixed-rate	debt	investments	with	interest	rate	swaps,	and	we	may	elect	to	hedge	interest	rate	risks	of	our indebtedness.	Gains	and	losses	on	these	instruments	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	debt	issuances.	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	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	$15	million	as	of	December	26,	2015	(an	increase	of	approximately	$10	million	as	of	December	27,	2014).	After	taking	into	account	interest rate	and	currency	swaps,	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	$1.6	billion	as	of	December	26,	2015	(an	increase	of	approximately	$1.0	billion	as	of	December	27,	2014).	The	increase	from December	27,	2014	was	primarily	driven	by	the	inclusion	of	 $9.5	billion	of	senior	unsecured	notes	issued	in	Q3	and	Q4	2015.	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	our	investments.	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	26,	2015,	the	fair	value	of	our	marketable	equity	investments	and	our	equity	derivative	instruments,	including	hedging	positions,	was $6.0 billion	($7.1	billion	as	of	December	27,	2014).	Substantially	all	of	our	marketable	equity	investments	portfolio	as	of	 December	26,	2015	was	concentrated in	our	investment	in	ASML	of	$5.7	billion	($6.9	billion	as	of	December	27,	2014).	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	decline	of	30%	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	$1.8	billion,	based	on	the	value	as	of December	26,	2015	(a	decrease	in	value	of	approximately	 $2.1	billion,	based	on	the	value	as	of	 December	27,	2014	using	an	assumed	decline	of	30%).

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	cost	method	equity	investments	had	a	carrying	amount of	$2.9	billion	as	of	December	26,	2015	($1.8	billion	as	of	December	27,	2014)	and	included	our	investment	in	UniSpreadtrum	(which	was	made	in	2015) and	Cloudera	of	$966	million	and	$454	million,	respectively	($454	million	for	Cloudera	as	of	December	27,	2014).	The	carrying	amount	of	our	non- marketable	equity	method	investments	was	$1.6	billion	as	of	December	26,	2015	($1.4	billion	as	of	December	27,	2014).	A	majority	of	our	non-marketable equity	method	investments	balance	as	of	December	26,	2015	was	concentrated	in	our	IMFT	and	Cloudera	investments	of	 $872	million	and	$256	million, respectively	($713	million	and	$280	million	for	IMFT	and	Cloudera,	respectively,	as	of	 December	27,	2014).

# Commodity	Price	Risk

Although	we	operate	facilities	that	consume	commodities,	we	are	not	directly	affected	by	commodity	price	risk	to	a	material	degree.	We	have	established forecasted	transaction	risk	management	programs	to	protect	against	fluctuations	in	the	fair	value	and	the	volatility	of	future	cash	flows	caused	by	changes in	commodity	prices.	In	addition,	we	have	sourcing	plans	in	place	for	our	key	commodities	that	mitigate	the	risk	of	a	potential	supplier	concentration.	For further	information	on	commodity	price	risk,	see	"Note	6:	Derivative	Financial	Instruments"	in	Part	II,	Item	8	of	this	Form	10-K.

# ITEM	8. FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA

# INDEX	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

| Reports	of	Independent	Registered	Public	Accounting	Firm | 59 |
| :--- | :--- |
| Consolidated\tStatements\tof\tIncome | 61 |
| Consolidated\tStatements\tof\tComprehensive\tIncome | 62 |
| Consolidated\tBalance\tSheets | 63 |
| Consolidated\tStatements\tof\tCash\tFlows | 64 |
| Consolidated\tStatements\tof\tStockholders'\tEquity | 65 |
| Notes\tto\tConsolidated\tFinancial\tStatements | 66 |
| Supplemental\tData:\tFinancial\tInformation\tby\tQuarter | 123 |

# 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	26,	2015	and	December	27,	2014,	and	the	related consolidated	statements	of	income,	comprehensive	income,	stockholders'	equity,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended December	26,	2015.	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	26,	2015	and	December	27,	2014,	and	the	consolidated	results	of	its	operations	and	its	cash	flows	for	each	of	the	three	years	in	the	period ended	December	26,	2015,	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	26,	2015,	based	on	criteria	established	in	Internal	Control—Integrated	Framework	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(2013	framework)	and	our	report	dated	February	12,	2016	expressed	an unqualified	opinion	thereon.

/s/	Ernst	&	Young	LLP

San	Jose,	California

We	have	audited	Intel	Corporation's	internal	control	over	financial	reporting	as	of	 December	26,	2015,	based	on	criteria	established	in	Internal	Control— Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(2013	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	26,	2015,	based	on the	COSO	criteria.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the 2015	consolidated financial	statements	of	Intel	Corporation	and	our	report	dated	February	12,	2016,	expressed	an	unqualified	opinion	thereon.

# CONSOLIDATED	STATEMENTS	OF	INCOME

| Years	Ended<br>(In	Millions,	Except	Per	Share	Amounts) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Net\trevenue | $55,355 | $55,870 | $52,708 |
| Cost\tof\tsales | 20,676 | 20,261 | 21,187 |
| Gross\tmargin | 34,679 | 35,609 | 31,521 |
| Research\tand\tdevelopment | 12,128 | 11,537 | 10,611 |
| Marketing,\tgeneral\tand\tadministrative | 7,930 | 8,136 | 8,088 |
| Restructuring\tand\tasset\timpairment\tcharges | 354 | 295 | 240 |
| Amortization\tof\tacquisition-related\tintangibles | 265 | 294 | 291 |
| Operating\texpenses | 20,677 | 20,262 | 19,230 |
| Operating\tincome | 14,002 | 15,347 | 12,291 |
| Gains\t(losses)\ton\tequity\tinvestments,\tnet | 315 | 411 | 471 |
| Interest\tand\tother,\tnet | (105) | 43 | (151) |
| Income\tbefore\ttaxes | 14,212 | 15,801 | 12,611 |
| Provision\tfor\ttaxes | 2,792 | 4,097 | 2,991 |
| Net\tincome | $11,420 | $11,704 | $9,620 |
| Basic\tearnings\tper\tshare\tof\tcommon\tstock | $2.41 | $2.39 | $1.94 |
| Diluted\tearnings\tper\tshare\tof\tcommon\tstock | $2.33 | $2.31 | $1.89 |
| Weighted\taverage\tshares\tof\tcommon\tstock\toutstanding: |  |  |  |
| Basic | 4,742 | 4,901 | 4,970 |
| Diluted | 4,894 | 5,056 | 5,097 |

See	accompanying	notes.

# CONSOLIDATED	STATEMENTS	OF	COMPREHENSIVE	INCOME

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Net\tincome | $11,420 | $11,704 | $9,620 |
| Other\tcomprehensive\tincome\t(loss),\tnet\tof\ttax: |  |  |  |
| Change\tin\tnet\tunrealized\tholding\tgains\t(losses)\ton\tavailable-for-sale\tinvestments | (710) | 577 | 1,181 |
| Change\tin\tdeferred\ttax\tasset\tvaluation\tallowance | (18) | (41) | (26) |
| Change\tin\tnet\tunrealized\tholding\tgains\t(losses)\ton\tderivatives | 157 | (427) | (89) |
| Change\tin\tnet\tprior\tservice\t(costs)\tcredits | 7 | (33) | 18 |
| Change\tin\tactuarial\tvaluation | 128 | (402) | 520 |
| Change\tin\tnet\tforeign\tcurrency\ttranslation\tadjustment | (170) | (251) | 38 |
| Other\tcomprehensive\tincome\t(loss) | (606) | (577) | 1,642 |
| Total\tcomprehensive\tincome | $10,814 | $11,127 | $11,262 |

# CONSOLIDATED	BALANCE	SHEETS

| (In	Millions,	Except	Par	Value) | Dec	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- |
| Assets |  |  |
| Current\tassets: |  |  |
| Cash\tand\tcash\tequivalents | $15,308 | $2,561 |
| Short-term\tinvestments | 2,682 | 2,430 |
| Trading\tassets | 7,323 | 9,063 |
| Accounts\treceivable,\tnet\tof\tallowance\tfor\tdoubtful\taccounts\tof\t$40\t($38\tin\t2014) | 4,787 | 4,427 |
| Inventories | 5,167 | 4,273 |
| Deferred\ttax\tassets | 2,036 | 1,958 |
| Other\tcurrent\tassets | 3,053 | 3,018 |
| Total\tcurrent\tassets | 40,356 | 27,730 |
| Property,\tplant\tand\tequipment,\tnet | 31,858 | 33,238 |
| Marketable\tequity\tsecurities | 5,960 | 7,097 |
| Other\tlong-term\tinvestments | 1,891 | 2,023 |
| Goodwill | 11,332 | 10,861 |
| Identified\tintangible\tassets,\tnet | 3,933 | 4,446 |
| Other\tlong-term\tassets | 7,735 | 6,505 |
| Total\tassets | $103,065 | $91,900 |
| Liabilities,\ttemporary\tequity,\tand\tstockholders'\tequity |  |  |
| Current\tliabilities: |  |  |
| Short-term\tdebt | $2,634 | $1,596 |
| Accounts\tpayable | 2,063 | 2,748 |
| Accrued\tcompensation\tand\tbenefits | 3,138 | 3,475 |
| Accrued\tadvertising | 960 | 1,092 |
| Deferred\tincome | 2,188 | 2,205 |
| Other\taccrued\tliabilities | 4,684 | 4,895 |
| Total\tcurrent\tliabilities | 15,667 | 16,011 |
| Long-term\tdebt | 20,036 | 12,059 |
| Long-term\tdeferred\ttax\tliabilities | 2,539 | 3,775 |
| Other\tlong-term\tliabilities | 2,841 | 3,278 |
| Commitments\tand\tcontingencies\t(Notes\t17\tand\t25) |  |  |
| Temporary\tequity | 897 | 912 |
| Stockholders'\tequity: |  |  |
| Preferred\tstock,\t$0.001\tpar\tvalue,\t50\tshares\tauthorized;\tnone\tissued | — | — |
| issued\tand\t4,748\toutstanding\tin\t2014)\tand\tcapital\tin\texcess\tof\tpar\tvalue | 23,411 | 21,781 |
| Accumulated\tother\tcomprehensive\tincome\t(loss) | 60 | 666 |
| Retained\tearnings | 37,614 | 33,418 |
| Total\tstockholders'\tequity | 61,085 | 55,865 |
| Total\tliabilities,\ttemporary\tequity,\tand\tstockholders'\tequity | $103,065 | $91,900 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Cash\tand\tcash\tequivalents,\tbeginning\tof\tperiod | $2,561 | $5,674 | $8,478 |
| Cash\tflows\tprovided\tby\t(used\tfor)\toperating\tactivities: |  |  |  |
| Net\tincome | 11,420 | 11,704 | 9,620 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation | 7,821 | 7,380 | 6,790 |
| Share-based\tcompensation | 1,305 | 1,148 | 1,118 |
| Restructuring\tand\tasset\timpairment\tcharges | 354 | 295 | 240 |
| Excess\ttax\tbenefit\tfrom\tshare-based\tpayment\tarrangements | (159) | (122) | (49) |
| Amortization\tof\tintangibles | 890 | 1,169 | 1,242 |
| (Gains)\tlosses\ton\tequity\tinvestments,\tnet | (263) | (354) | (425) |
| Deferred\ttaxes | (1,270) | (703) | (900) |
| Changes\tin\tassets\tand\tliabilities: |  |  |  |
| Accounts\treceivable | (355) | (861) | 271 |
| Inventories | (764) | (98) | 563 |
| Accounts\tpayable | (312) | (249) | 267 |
| Accrued\tcompensation\tand\tbenefits | (711) | 4 | 155 |
| Income\ttaxes\tpayable\tand\treceivable | 386 | (286) | 1,019 |
| Other\tassets\tand\tliabilities | 675 | 1,391 | 865 |
| Total\tadjustments | 7,597 | 8,714 | 11,156 |
| Net\tcash\tprovided\tby\toperating\tactivities | 19,017 | 20,418 | 20,776 |
| Cash\tflows\tprovided\tby\t(used\tfor)\tinvesting\tactivities: |  |  |  |
| Additions\tto\tproperty,\tplant\tand\tequipment | (7,326) | (10,105) | (10,711) |
| Acquisitions,\tnet\tof\tcash\tacquired | (913) | (934) | (925) |
| Purchases\tof\tavailable-for-sale\tinvestments | (8,259) | (7,007) | (12,493) |
| Sales\tof\tavailable-for-sale\tinvestments | 2,090 | 1,227 | 934 |
| Maturities\tof\tavailable-for-sale\tinvestments | 6,168 | 8,944 | 8,336 |
| Purchases\tof\ttrading\tassets | (11,485) | (14,397) | (16,718) |
| Maturities\tand\tsales\tof\ttrading\tassets | 13,372 | 13,165 | 13,677 |
| Investments\tin\tloans\treceivable\tand\treverse\trepurchase\tagreements | (2,550) | (150) | (200) |
| Collection\tof\tloans\treceivable\tand\treverse\trepurchase\tagreements | 2,116 | 117 | 50 |
| Investments\tin\tnon-marketable\tequity\tinvestments | (2,011) | (1,377) | (440) |
| Purchases\tof\tlicensed\ttechnology\tand\tpatents | (120) | (92) | (36) |
| Other\tinvesting | 735 | 704 | 453 |
| Net\tcash\tused\tfor\tinvesting\tactivities | (8,183) | (9,905) | (18,073) |
| Cash\tflows\tprovided\tby\t(used\tfor)\tfinancing\tactivities: |  |  |  |
| Increase\t(decrease)\tin\tshort-term\tdebt,\tnet | (474) | 235 | (31) |
| Proceeds\tfrom\tgovernment\tgrants | 105 | 104 | 129 |
| Excess\ttax\tbenefit\tfrom\tshare-based\tpayment\tarrangements | 159 | 122 | 49 |
| Issuance\tof\tlong-term\tdebt,\tnet\tof\tissuance\tcosts | 9,476 | — | — |
| Proceeds\tfrom\tsales\tof\tcommon\tstock\tthrough\temployee\tequity\tincentive\tplans | 866 | 1,660 | 1,588 |
| Repurchase\tof\tcommon\tstock | (3,001) | (10,792) | (2,147) |
| Restricted\tstock\tunit\twithholdings | (442) | (332) | (293) |
| Payment\tof\tdividends\tto\tstockholders | (4,556) | (4,409) | (4,479) |
| Collateral\tassociated\twith\trepurchase\tof\tcommon\tstock | 325 | (325) | — |
| Increase\t(decrease)\tin\tliability\tdue\tto\tcollateral\tassociated\twith\trepurchase\tof\tcommon\nstock | (325) | 325 | — |
| Other\tfinancing | (221) | (199) | (314) |
| Net\tcash\tprovided\tby\t(used\tfor)\tfinancing\tactivities | 1,912 | (13,611) | (5,498) |
| Effect\tof\texchange\trate\tfluctuations\ton\tcash\tand\tcash\tequivalents | 1 | (15) | (9) |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | 12,747 | (3,113) | (2,804) |
| Cash\tand\tcash\tequivalents,\tend\tof\tperiod | $15,308 | $2,561 | $5,674 |
| Supplemental\tdisclosures\tof\tcash\tflow\tinformation: |  |  |  |
| Cash\tpaid\tduring\tthe\tyear\tfor: |  |  |  |
| Interest,\tnet\tof\tcapitalized\tinterest | $186 | $167 | $204 |
| Income\ttaxes,\tnet\tof\trefunds | $3,439 | $4,639 | $2,874 |

# 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 |  |  |
| (In\tMillions,\tExcept\tPer\tShare\tAmounts) | Number\tof\nShares | Amount | Comprehensive\nIncome\t(Loss) | Retained\nEarnings | Total |
| 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\tcommon\tstock\tthrough |  |  |  |  |  |
| employee\tequity\tincentive\tplans,\tnet\ttax\tdeficiency, |  |  |  |  |  |
| and\tother | 130 | 1,593 | — | — | 1,593 |
| Share-based\tcompensation | — | 1,117 | — | — | 1,117 |
| Repurchase\tof\tcommon\tstock | (94) | (345) | — | (1,802) | (2,147) |
| Restricted\tstock\tunit\twithholdings | (13) | (293) | — | — | (293) |
| Cash\tdividends\tdeclared\t($0.90\tper\tshare\tof\tcommon\nstock) | — | — | — | (4,479) | (4,479) |
| Balance\tas\tof\tDecember\t28,\t2013 | 4,967 | 21,536 | 1,243 | 35,477 | 58,256 |
| Components\tof\tcomprehensive\tincome,\tnet\tof\ttax: |  |  |  |  |  |
| Net\tincome | — | — | — | 11,704 | 11,704 |
| Other\tcomprehensive\tincome\t(loss) | — | — | (577) | — | (577) |
| Total\tcomprehensive\tincome |  |  |  |  | 11,127 |
| Proceeds\tfrom\tsales\tof\tcommon\tstock\tthrough |  |  |  |  |  |
| employee\tequity\tincentive\tplans,\tnet\texcess\ttax |  |  |  |  |  |
| benefit,\tand\tother | 125 | 1,787 | — | — | 1,787 |
| Share-based\tcompensation | — | 1,140 | — | — | 1,140 |
| Temporary\tequity\treclassification | — | (912) | — | — | (912) |
| Repurchase\tof\tcommon\tstock | (332) | (1,438) | — | (9,354) | (10,792) |
| Restricted\tstock\tunit\twithholdings | (12) | (332) | — | — | (332) |
| Cash\tdividends\tdeclared\t($0.90\tper\tshare\tof\tcommon\nstock) | — | — | — | (4,409) | (4,409) |
| Balance\tas\tof\tDecember\t27,\t2014 | 4,748 | 21,781 | 666 | 33,418 | 55,865 |
| Components\tof\tcomprehensive\tincome,\tnet\tof\ttax: |  |  |  |  |  |
| Net\tincome | — | — | — | 11,420 | 11,420 |
| Other\tcomprehensive\tincome\t(loss) | — | — | (606) | — | (606) |
| Total\tcomprehensive\tincome |  |  |  |  | 10,814 |
| Proceeds\tfrom\tsales\tof\tcommon\tstock\tthrough |  |  |  |  |  |
| employee\tequity\tincentive\tplans,\tnet\texcess\ttax |  |  |  |  |  |
| benefit,\tand\tother | 87 | 1,076 | — | — | 1,076 |
| Share-based\tcompensation | — | 1,314 | — | — | 1,314 |
| Temporary\tequity\treclassification | — | 15 | — | — | 15 |
| Repurchase\tof\tcommon\tstock | (96) | (453) | — | (2,548) | (3,001) |
| Restricted\tstock\tunit\twithholdings | (14) | (322) | — | (120) | (442) |
| Cash\tdividends\tdeclared\t($0.96\tper\tshare\tof\tcommon\nstock) | — | — | — | (4,556) | (4,556) |
| Balance\tas\tof\tDecember\t26,\t2015 | 4,725 | $23,411 | $60 | $37,614 | $61,085 |

# 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	 2015,	2014,	and	2013	were	52-week	years.	Fiscal	year 2016	is	a	53-week	fiscal	year,	and	the	first	quarter	of	2016	will	be	a	14-week	quarter.	Our	consolidated	financial	statements	include	the	accounts	of	Intel Corporation	(Intel)	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.	We	have	reclassified	certain	prior	period	amounts	to	conform	to	current	period	presentation.

As	a	result	of	our	integration	of	McAfee	Inc.	(McAfee)	in	the	third	quarter	of	2015,	the	functional	currency	for	operations	previously	acquired	from	McAfee was	changed	to	the	U.S.	dollar,	making	the	U.S.	dollar	the	functional	currency	for	Intel	and	our	subsidiaries.

# 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	valuation	and	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 cost	method	investments,	cost	method	loans	receivable,	equity	method	investments,	grants	receivable,	and	reverse	repurchase	agreements	with	original maturities	greater	than	approximately	three	months.	Substantially	all	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.

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS	(Continued)

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	16:	Retirement	Benefit	Plans."

# 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	corporate	debt,	financial	institution	instruments,	government	debt,	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	equity	method	and	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	impairments	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	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	or	economic	changes;

•the	management	and	governance	structure	of	the	investee;

•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

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

We	record	other-than-temporary	impairments	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	risk	and	interest	rate	risk,	and,	to	a	lesser	extent, equity	market	risk,	commodity	price	risk,	and	credit	risk.	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.	Generally,	our	master	netting	agreements	allow	for	net	settlement	in	case	of	certain	triggering	events	such	as bankruptcy	or	default	of	one	of	the	counterparties	to	the	transaction.	We	may	also	elect	to	exchange	cash	collateral	with	certain	of	our	counterparties	on	a regular	basis.	For	presentation	on	our	consolidated	balance	sheets,	we	do	not	offset	fair	value	amounts	recognized	for	derivative	instruments	under master	netting	arrangements.	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	hedge	accounting	designation.

A	designated	hedge	with	exposure	to	variability	in	the	functional	currency	equivalent	of	the	future	foreign	currency	cash	flows	of	a	forecasted	transaction or	variability	in	the	functional	currency	equivalent	cash	flows	of	a	recognized	asset	or	liability	are	examples	of	cash	flow	hedges.	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.

A	designated	hedge	with	exposure	to	changes	in	the	fair	value	of	a	recognized	asset	or	liability	that	are	attributable	to	the	changes	in	the	benchmark interest	rate	is	one	example	of	a	fair	value	hedge.	For	derivatives	with	fair	value	hedge	accounting	designation,	the	gains	and	losses	of	the	hedge	as	well as	the	offsetting	gains	and	losses	attributable	to	the	changes	in	the	benchmark	interest	rate	on	the	underlying	hedged	item	are	recognized	in	earnings	in the	current	period.	Derivatives	that	we	designated	as	fair	value	hedges	are	classified	in	the	consolidated	statements	of	cash	flows	in	the	same	section	as the	underlying	item,	primarily	within	cash	flows	from	financing	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,	which	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.	Realized	gains	and	losses	from	derivatives	not	designated	as	hedges	are	classified	in the	consolidated	statements	of	cash	flows	within	cash	flows	from	operating	activities	or	investing	activities,	depending	on	the	activity	the	exposure	is	most closely	associated	with.

# 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	and	financing 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	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- |
| Raw\tmaterials | $532 | $462 |
| Work\tin\tprocess | 2,893 | 2,375 |
| Finished\tgoods | 1,742 | 1,436 |
| Total\tinventories | $5,167 | $4,273 |

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

| (In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- |
| Land\tand\tbuildings | $25,578 | $22,989 |
| Machinery\tand\tequipment | 48,459 | 44,441 |
| Construction\tin\tprogress | 9,359 | 12,279 |
| Total\tproperty,\tplant\tand\tequipment,\tgross | 83,396 | 79,709 |
| Less:\taccumulated\tdepreciation | (51,538) | (46,471) |
| Total\tproperty,\tplant\tand\tequipment,\tnet | $31,858 | $33,238 |

We	compute	depreciation	for	financial	reporting	purposes	using	the	straight-line	method.	As	of	 December	26,	2015,	substantially	all	of	our	depreciable property,	plant	and	equipment	assets	were	depreciated	over	the	following	estimated	useful	lives:	machinery	and	equipment,	2	to	4	years;	and	buildings, 10	to	25	years.	Beginning	in	2016,	our	machinery	and	equipment	will	be	depreciated	over	 2	to	5	years.

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

Included	within	construction	in	progress	we	have	certain	facilities	on	hold	and	 not	in	use.	These	facilities	are	being	held	in	a	safe	state,	and	we	have	plans to	place	them	into	service	at	a	future	date.	Depreciation	is	not	recognized	on	these	assets	and	they	are	not	eligible	for	capitalized	interest	when construction	is	on	hold.	The	balance	of	such	assets	was	approximately	$3.4	billion	as	of	December	26,	2015	(approximately	$2.2	billion	as	of	December 27,	2014).

We	record	goodwill	when	the	purchase	price	of	an	acquisition	exceeds	the	fair	value	of	the	net	tangible	and	identified	intangible	assets	acquired.	We assign	the	goodwill	to	our	reporting	units	based	on	the	relative	expected	fair	value	provided	by	the	acquisition.	We	perform	an	annual	impairment assessment	in	the	fourth	quarter	of	each	year,	or	more	frequently	if	indicators	of	potential	impairment	exist,	which	includes	evaluating	qualitative	and quantitative	factors	to	assess	the	likelihood	of	an	impairment	of	a	reporting	unit's	goodwill.	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	all	identified	intangible	assets	that	are	subject	to	amortization	as	of December	26,	2015	were	as	follows:

| (In	Years) | Estimated<br>Useful	Life | Estimated<br>Useful	Life |
| :--- | :--- | :--- |
| Acquisition-related\tdeveloped\ttechnology | 3 – | 9 |
| Acquisition-related\tcustomer\trelationships | 5 – | 11 |
| Acquisition-related\tbrands | 5 – | 8 |
| Licensed\ttechnology\tand\tpatents | 2 – | 17 |

We	perform	a	quarterly	review	of	significant	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, which	is	calculated	based	on	projected	discounted	net	cash	flows.	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	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	collectability.	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	our	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	on	our	McAfee	products	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	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	to	customers	over	the	fair	value	of	the advertising	benefit	we	receive	as	a	reduction	in	revenue.	Advertising	costs,	including	direct	marketing	costs,	recorded	within	MG&A	expenses	were	$1.8 billion	in	2015	($1.8	billion	in	2014	and	$1.9	billion	in	2013).

# Employee	Equity	Incentive	Plans

We	have	employee	equity	incentive	plans,	which	are	described	more	fully	in	" Note	18:	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	RSUs	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 23:	Income	Taxes."

# Note	3:	Recent	Accounting	Standards

In	May	2014,	the	Financial	Accounting	Standards	Board	(FASB)	issued	a	new	standard	to	achieve	a	consistent	application	of	revenue	recognition	within the	U.S.,	resulting	in	a	single	revenue	model	to	be	applied	by	reporting	companies	under	U.S.	generally	accepted	accounting	principles.	Under	the	new model,	recognition	of	revenue	occurs	when	a	customer	obtains	control	of	promised	goods	or	services	in	an	amount	that	reflects	the	consideration	to	which the	entity	expects	to	be	entitled	in	exchange	for	those	goods	or	services.	In	addition,	the	new	standard	requires	that	reporting	companies	disclose	the nature,	amount,	timing,	and	uncertainty	of	revenue	and	cash	flows	arising	from	contracts	with	customers.	On	July	9,	2015,	the	FASB	agreed	to	delay	the effective	date	by	one	year;	accordingly,	the	new	standard	is	effective	for	us	beginning	in	the	first	quarter	of	2018	and	we	expect	to	adopt	it	at	that	time.	The new	standard	is	required	to	be	applied	retrospectively	to	each	prior	reporting	period	presented	or	retrospectively	with	the	cumulative	effect	of	initially applying	it	recognized	at	the	date	of	initial	application.	We	have	not	yet	selected	a	transition	method,	nor	have	we	determined	the	impact	of	the	new standard	on	our	consolidated	financial	statements.

In	2015,	the	FASB	issued	an	amended	standard	requiring	that	we	classify	all	deferred	tax	assets	and	liabilities	as	non-current	on	the	balance	sheet instead	of	separating	deferred	taxes	into	current	and	non-current.	The	amended	standard	is	effective	for	us	beginning	in	the	first	quarter	of	2017;	early adoption	is	permitted	and	we	are	evaluating	whether	we	will	early	adopt.	The	amended	standard	may	be	adopted	on	either	a	prospective	or	retrospective basis.	We	do	not	expect	that	the	adoption	of	this	standard	will	have	a	significant	impact	on	our	financial	position	or	results	of	operations.

In	2015,	the	FASB	issued	an	amended	standard	requiring	that	we	recognize	the	effect	on	earnings	of	any	adjustments	identified	during	the	measurement period	after	an	acquisition	in	the	same	period	the	adjustment	is	identified,	as	opposed	to	the	prior	standard	which	required	material	adjustments	be retrospectively	adjusted.	The	amended	standard	is	effective	for	us	beginning	in	the	first	quarter	of	2016.	We	do	not	expect	that	the	adoption	of	this standard	will	have	a	significant	impact	on	our	consolidated	financial	statements.

In	January	2016,	the	FASB	issued	changes	to	the	accounting	for	financial	instruments	that	primarily	affect	equity	investments,	financial	liabilities	under the	fair	value	option,	and	the	presentation	and	disclosure	requirements	for	financial	instruments.	This	standard	is	effective	for	us	beginning	in	the	first quarter	of	2018;	certain	provisions	allow	for	early	adoption	and	we	are	evaluating	whether	we	will	elect	to	early	adopt	these	provisions.	The	new	standard should	be	applied	by	means	of	a	cumulative-effect	adjustment	to	the	balance	sheet	as	of	the	beginning	of	the	fiscal	year	of	adoption,	with	certain exceptions.	We	have	not	yet	determined	the	impact	of	the	new	standard	on	our	consolidated	financial	statements.

In	2015,	we	adopted	an	amended	standard	simplifying	the	presentation	of	debt	issuance	costs	as	a	direct	deduction	from	the	carrying	value	of	the	debt liability	rather	than	showing	the	debt	issuance	costs	as	an	asset.	We	have	applied	the	amendment	retrospectively	to	the	comparable	period	presented	and it	did	not	have	a	significant	impact	on	our	financial	statements.

# Note	4:	Fair	Value

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

Assets	and	liabilities	measured	and	recorded	at	fair	value	on	a	recurring	basis	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: |  |  |  |  |  |  |  |  |
| Corporate\tdebt | $— | $1,829 | $— | $1,829 | $— | $48 | $— | $48 |
| Financial\tinstitution\tinstruments | 8,238 | 1,277 | — | 9,515 | 321 | 1,119 | — | 1,440 |
| Government\tdebt | — | 130 | — | 130 | — | — | — | — |
| Reverse\trepurchase\tagreements | — | 2,368 | — | 2,368 | — | 268 | — | 268 |
| Short-term\tinvestments: |  |  |  |  |  |  |  |  |
| Corporate\tdebt | 336 | 764 | 20 | 1,120 | 363 | 412 | 31 | 806 |
| Financial\tinstitution\tinstruments | 145 | 927 | — | 1,072 | 149 | 1,050 | — | 1,199 |
| Government\tdebt | 65 | 425 | — | 490 | 252 | 173 | — | 425 |
| Trading\tassets: |  |  |  |  |  |  |  |  |
| Asset-backed\tsecurities | — | 275 | 94 | 369 | — | 766 | 58 | 824 |
| Corporate\tdebt | 1,744 | 564 | — | 2,308 | 2,625 | 339 | — | 2,964 |
| Financial\tinstitution\tinstruments | 930 | 701 | — | 1,631 | 1,146 | 613 | — | 1,759 |
| Government\tdebt | 1,107 | 1,908 | — | 3,015 | 1,295 | 2,221 | — | 3,516 |
| Other\tcurrent\tassets: |  |  |  |  |  |  |  |  |
| Derivative\tassets | 32 | 412 | 1 | 445 | — | 559 | 2 | 561 |
| Loans\treceivable | — | 137 | — | 137 | — | 505 | — | 505 |
| Marketable\tequity\tsecurities | 5,891 | 69 | — | 5,960 | 7,097 | — | — | 7,097 |
| Other\tlong-term\tinvestments: |  |  |  |  |  |  |  |  |
| Asset-backed\tsecurities | — | — | 4 | 4 | — | 2 | 4 | 6 |
| Corporate\tdebt | 407 | 801 | — | 1,208 | 453 | 728 | 13 | 1,194 |
| Financial\tinstitution\tinstruments | 171 | 381 | — | 552 | 189 | 319 | — | 508 |
| Government\tdebt | 79 | 48 | — | 127 | 75 | 240 | — | 315 |
| Other\tlong-term\tassets: |  |  |  |  |  |  |  |  |
| Derivative\tassets | — | 30 | 10 | 40 | — | 35 | 22 | 57 |
| Loans\treceivable | — | 342 | — | 342 | — | 216 | — | 216 |
| Total\tassets\tmeasured\tand\trecorded\nat\tfair\tvalue | 19,145 | 13,388 | 129 | 32,662 | 13,965 | 9,613 | 130 | 23,708 |
| Liabilities |  |  |  |  |  |  |  |  |
| Other\taccrued\tliabilities: |  |  |  |  |  |  |  |  |
| Derivative\tliabilities | 2 | 210 | — | 212 | — | 563 | — | 563 |
| Other\tlong-term\tliabilities: |  |  |  |  |  |  |  |  |
| Derivative\tliabilities | — | 33 | — | 33 | — | 17 | — | 17 |
| Total\tliabilities\tmeasured\tand\nrecorded\tat\tfair\tvalue | $2 | $243 | $— | $245 | $— | $580 | $— | $580 |

Government	debt	includes	instruments	such	as	non-U.S.	government	bonds	and	U.S.	agency	securities. 	Financial	institution	instruments	include instruments	issued	or	managed	by	financial	institutions	in	various	forms,	such	as	commercial	paper,	fixed	and	floating	rate	bonds,	money	market	fund deposits,	and	time	deposits.

For	the	year	ended	December	26,	2015,	we	transferred	corporate	debt	and	financial	institution	instruments	of	approximately	 $628	million	from	Level	1	to Level	2	of	the	fair	value	hierarchy	and	approximately	$403	million	of	financial	institution	instruments,	corporate	debt,	and	government	debt	from	Level	2	to Level	1	($177	million	of	corporate	debt,	financial	institution	instruments,	and	government	debt	from	Level	1	to	Level	2	and	 $395	million	from	Level	2	to Level	1	during	2014).	These	transfers	were	based	on	changes	in	market	activity	for	the	underlying	instruments.	Our	policy	is	to	reflect	transfers	between the	fair	value	hierarchy	levels	at	the	beginning	of	the	quarter	in	which	a	change	in	circumstances	resulted	in	the	transfer.

# Investments	in	Debt	Instruments

Debt	instruments	reflected	in	the	preceding	table	include	investments	such	as	asset-backed	securities,	corporate	debt,	financial	institution	instruments, government	debt,	and	reverse	repurchase	agreements	classified	as	cash	equivalents.	We	classify	our	debt	instruments	as	Level	2	when	we	use observable	market	prices	for	identical	instruments	that	are	traded	in	less	active	markets.	When	observable	market	prices	for	identical	instruments	are	not available,	we	price	the	debt	instruments	using	our	own	models,	such	as	a	discounted	cash	flow	model,	or	non-binding	market	consensus	prices	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	instruments;	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.	When	we	use	non-binding	market	consensus	prices,	we corroborate	them	with	quoted	market	prices	for	similar	instruments	or	compare	them	to	output	from	internally	developed	pricing	models	such	as	a discounted	cash	flow	model.	The	discounted	cash	flow	model	uses	observable	market	inputs,	such	as	LIBOR-based	yield	curves,	currency	spot	and forward	rates,	and	credit	ratings.	All	significant	inputs	are	derived	from	or	corroborated	with	observable	market	data.

The	fair	values	of	debt	instruments	classified	as	Level	3	 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	help	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	26,	2015	and	December	27,	2014,	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	gains or	losses	on	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	currency 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	following	"Financial	Instruments	Not	Recorded	at	Fair	Value	on	a	Recurring	Basis"	section.

# 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	is	recognized.

Some	of	our	non-marketable	equity	investments	have	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	impairments.	We	classified	these	investments	as	Level	3	because	the valuations	used	unobservable	inputs	that	were	significant	to	the	fair	value	measurements	and	required	management	judgment	due	to	the	absence	of quoted	market	prices.	Impairments	recognized	on	non-marketable	equity	investments	held	as	of	December	26,	2015	were	$160	million	in	2015	($128 million	in	2014	on	non-marketable	equity	investments	held	as	of	 December	27,	2014	and	$106	million	in	2013	on	non-marketable	equity	investments	held as	of	December	28,	2013).

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

On	a	quarterly	basis,	we	measure	the	fair	value	of	our	grants	receivable,	cost	method	loans	receivable,	non-marketable	cost	method	investments,	reverse repurchase	agreements	with	original	maturities	greater	than	approximately	three	months,	and	indebtedness	carried	at	amortized	cost	plus	applicable hedge	adjustments;	however,	the	assets	are	recorded	at	fair	value	only	when	an	impairment	is	recognized.	The	carrying	amounts	and	fair	values	of 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 |
| Grants\treceivable | $593 | $— | $600 | $— | $600 |
| Loans\treceivable | $315 | $— | $315 | $— | $315 |
| Non-marketable\tcost\tmethod\tinvestments | $2,933 | $— | $— | $3,904 | $3,904 |
| Reverse\trepurchase\tagreements | $1,000 | $— | $1,000 | $— | $1,000 |
| Short-term\tdebt | $2,593 | $1,513 | $1,563 | $— | $3,076 |
| Long-term\tdebt | $20,036 | $14,058 | $6,835 | $— | $20,893 |
| NVIDIA\tCorporation\tcross-license\tagreement\tliability | $199 | $— | $200 | $— | $200 |

|  | Carrying |  | Fair	Value	Measured	Using |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Amount | Level\t1 | Level\t2 | Level\t3 | Fair\tValue |
| Grants\treceivable | $676 | $— | $679 | $— | $679 |
| Loans\treceivable | $250 | $— | $250 | $— | $250 |
| Non-marketable\tcost\tmethod\tinvestments | $1,769 | $— | $— | $2,599 | $2,599 |
| Reverse\trepurchase\tagreements | $450 | $— | $450 | $— | $450 |
| Short-term\tdebt | $1,580 | $— | $2,145 | $— | $2,145 |
| Long-term\tdebt | $12,059 | $11,467 | $1,309 | $— | $12,776 |
| NVIDIA\tCorporation\tcross-license\tagreement\tliability | $395 | $— | $399 | $— | $399 |

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	26,	2015	and	December	27,	2014,	the	carrying	amount	of	our	grants	receivable	was	classified	within	other	current	assets	and other	long-term	assets,	as	applicable.

The	carrying	amount	and	fair	value	of	loans	receivable	exclude	loans	measured	and	recorded	at	fair	value	on	a	recurring	basis.	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.	All	significant	inputs in	the	models	are	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	for	most	of	our	loans	receivable	and	 a	substantial	majority	of	our reverse	repurchase	agreements	as	of	December	26,	2015.

As	of	December	26,	2015,	and	December	27,	2014,	the	unrealized	loss	position	of	our	non-marketable	cost	method	investments	was	 insignificant.	Our non-marketable	cost	method	investments	are	valued	using	a	qualitative	and	quantitative	analysis	of	events	or	circumstances	that	impact	the	fair	value	of the	investment.	Qualitative	analysis	of	our	investments	involves	understanding	our	investee's	revenue	and	earnings	trends	relative	to	pre-defined milestones	and	overall	business	prospects;	the	technological	feasibility	of	our	investee's	products	and	technologies;	the	general	market	conditions	in	the investee's	industry	or	geographic	area,	including	adverse	regulatory	or	economic	changes;	and	the	management	and	governance	structure	of	the investee.	Quantitative	assessments	of	the	fair	value	of	our	investments	are	developed	using	the	market	and	income	approaches.	The	market	approach includes	the	use	of	financial	metrics	and	ratios	of	comparable	public	companies,	such	as	revenue,	earnings,	comparable	performance	multiples,	recent financing	rounds,	the	terms	of	the	investees'	issued	interests,	and	the	level	of	marketability	of	the	investments.	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	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.	We	measure	the	fair	value	of	our	non-marketable	cost	method	investments	as	close	to	the	end	of	the	period	as	feasible.

The	carrying	amount	and	fair	value	of	short-term	debt	exclude	drafts	payable.	Our	short-term	debt	recognized	at	amortized	cost	includes	our	2009	junior subordinated	convertible	debentures	due	2039	(2009	debentures)	and	our	2011	senior	notes	due	2016.	During	the	fourth	quarter	of	2015,	the	2009 debentures	were	classified	as	short-term	debt	on	the	consolidated	balance	sheet	and	convertible	at	the	option	of	the	holder	during	the	first	quarter	of 2016.	For	further	information,	see	"Note	15:	Borrowings."	Our	long-term	debt	recognized	at	amortized	cost	is	composed	of	our	senior	notes	and	our convertible	debentures.	The	fair	value	of	our	senior	notes	is	classified	as	Level	1	when	we	use	quoted	prices	in	active	markets	and	Level	2	when	the quoted	prices	are	from	less	active	markets	or	when	other	observable	inputs	are	used	to	determine	fair	value.	The	fair	value	of	our	2009	and	2005 convertible	debentures	is	determined	using	discounted	cash	flow	models	with	observable	market	inputs,	and	takes	into	consideration	variables	such	as interest	rate	changes,	comparable	instruments,	subordination	discount,	and	credit-rating	changes;	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,	pursuant	to	which	we	agreed	to	make	payments	to	NVIDIA	over	six	years.	The	carrying	amount	of the	liability	arising	from	the	agreement	was	classified	within	other	accrued	liabilities	and	other	long-term	liabilities,	based	on	the	expected	timing	of	the underlying	payments	($200	million	due	in	each	of	January	2015	and	2016	treated	as	cash	used	for	financing	activities).	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	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- |
| Available-for-sale\tinvestments | $22,007 | $13,038 |
| Cash | 1,466 | 805 |
| Equity\tmethod\tinvestments | 1,590 | 1,446 |
| Loans\treceivable | 794 | 971 |
| Non-marketable\tcost\tmethod\tinvestments | 2,933 | 1,769 |
| Reverse\trepurchase\tagreements | 3,368 | 718 |
| Trading\tassets | 7,323 | 9,063 |
| Total\tcash\tand\tinvestments | $39,481 | $27,810 |

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

|  |  | December	26,	2015 |  |  |  | December	27,	2014 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (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 | $5 | $— | $(1) | $4 | $8 | $— | $(2) | $6 |
| Corporate\tdebt | 4,164 | 3 | (10) | 4,157 | 2,040 | 13 | (5) | 2,048 |
| Financial\tinstitution\ninstruments | 11,140 | 1 | (2) | 11,139 | 3,146 | 2 | (1) | 3,147 |
| Government\tdebt | 748 | — | (1) | 747 | 741 | — | (1) | 740 |
| Marketable\tequity\tsecurities | 3,254 | 2,706 | — | 5,960 | 3,318 | 3,779 | — | 7,097 |
| Total\tavailable-for-sale\ninvestments | $19,311 | $2,710 | $(14) | $22,007 | $9,253 | $3,794 | $(9) | $13,038 |

Government	debt	includes	instruments	such	as	non-U.S.	government	bonds	and	U.S.	agency	securities. 	Financial	institution	instruments	include instruments	issued	or	managed	by	financial	institutions	in	various	forms,	such	as	commercial	paper,	fixed	and	floating	rate	bonds,	money	market	fund deposits,	and	time	deposits.	Substantially	all	time	deposits	were	issued	by	institutions	outside	the	U.S.	as	of	 December	26,	2015	and	December	27,	2014.

For	information	on	the	unrealized	holding	gains	(losses)	on	available-for-sale	investments	reclassified	out	of	accumulated	other	comprehensive	income (loss)	into	the	consolidated	statements	of	income,	see	"Note	24:	Other	Comprehensive	Income	(Loss)."

During	2015,	we	sold	available-for-sale	investments	for	proceeds	of	 $2.2	billion,	of	which	$144	million	related	to	sales	of	cash	and	cash	equivalents	( $1.7 billion	in	2014,	of	which	$509	million	related	to	sales	of	cash	and	cash	equivalents;	and	 $1.3	billion	in	2013,	of	which	$339	million	related	to	sales	of	cash and	cash	equivalents).	The	gross	realized	gains	on	sales	of	available-for-sale	investments	were	$133	million	in	2015	($136	million	in	2014	and	$146 million	in	2013).	We	determine	the	cost	of	an	investment	sold	on	an	average	cost	basis	at	the	individual	security	level.	Impairments	recognized	on available-for-sale	investments	were	insignificant	for	all	periods	presented.

The	amortized	cost	and	fair	value	of	available-for-sale	debt	investments,	by	contractual	maturity,	as	of

| (In	Millions) | Cost | Fair	Value |
| :--- | :--- | :--- |
| Due\tin\t1\tyear\tor\tless | $5,896 | $5,893 |
| Due\tin\t1–2\tyears | 1,271 | 1,268 |
| Due\tin\t2–5\tyears | 623 | 620 |
| Instruments\tnot\tdue\tat\ta\tsingle\tmaturity\tdate | 8,267 | 8,266 |
| Total | $16,057 | $16,047 |

# Equity	Method	Investments

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

|  | December	26,	2015 |  | December	27,	2014 |  |
| :--- | :--- | :--- | :--- | :--- |
| (Dollars\tIn\tMillions) | Carrying\nValue | Ownership\nPercentage | Carrying\nValue | Ownership\nPercentage |
| IM\tFlash\tTechnologies,\tLLC | $872 | 49% | $713 | 49% |
| Cloudera,\tInc. | 256 | 17% | 280 | 17% |
| Intel-GE\tCare\tInnovations,\tLLC | 64 | 50% | 108 | 50% |
| Other\tequity\tmethod\tinvestments | 398 |  | 345 |  |
| Total | $1,590 |  | $1,446 |  |

# IM	Flash	Technologies,	LLC

Since	the	inception	of	IM	Flash	Technologies,	LLC	(IMFT)	in	2006,	Micron	Technology,	Inc.	(Micron)	and	Intel	have	jointly	developed	NAND	flash	memory and,	most	recently,	3D	XPoint	technology	products.	Intel	also	purchases	jointly	developed	products	directly	from	Micron	under	certain	supply	agreements.

The	IMFT	operating	agreement,	most	recently	amended	in	January	2016,	continues	through	2024	unless	earlier	terminated	under	certain	terms	and conditions,	and	provides	for	certain	buy-sell	rights	of	the	joint	venture.	Intel	has	the	right	to	cause	Micron	to	buy	our	interest	in	IMFT.	If	we	exercise	this right,	Micron	would	set	the	closing	date	of	the	transaction	within	two	years	following	such	election	and	could	elect	to	receive	financing	from	us	for	one	to two	years.	Subsequent	to	our	put	right,	and	commencing	in	January	2019,	Micron	has	the	right	to	call	our	interest	in	IMFT	with	the	closing	date	to	be effective	within	one	year.	IMFT	is	a	variable	interest	entity,	and	all	costs	of	IMFT	are	passed	on	to	Micron	and	Intel	through	sale	of	products	or	services	in proportional	share	of	ownership.	Intel's	portion	of	IMFT	costs,	primarily	related	to	product	purchases	and	production-related	services,	was	approximately $400	million	in	2015	(approximately	$400	million	in	2014	and	approximately	$380	million	in	2013).	The	amount	due	to	IMFT	for	product	purchases	and services	provided	was	approximately	$20	million	as	of	December	26,	2015	(approximately	$60	million	as	of	December	27,	2014).	IMFT	returned	$6 million	to	Intel	in	2014,	which	is	reflected	within	investing	activities	on	the	consolidated	statements	of	cash	flows	( $45	million	in	2013).

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	$872	million	as	of	December	26,	2015.	Except	for	the	amount	due	to	IMFT	for	product	purchases	and	production- related	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	26,	2015.	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	using	the	equity	method	of	accounting.

# Cloudera,	Inc.

During	2014,	we	invested	in	Cloudera,	Inc.	(Cloudera).	Our	fully	diluted	ownership	interest	in	Cloudera	is	 17%	as	of	December	26,	2015.	Our	investment is	accounted	for	under	the	equity	and	cost	methods	of	accounting	based	on	the	rights	associated	with	different	instruments	we	own,	and	is	classified within	other	long-term	assets.	The	carrying	value	of	our	equity	method	investment	was	$256	million	and	of	our	cost	method	investment	was	 $454	million as	of	December	26,	2015	($280	million	for	our	equity	method	investment	and	 $454	million	for	our	cost	method	investment	as	of	 December	27,	2014).

# Intel-GE	Care	Innovations,	LLC

During	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.

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	$64	million	as	of	December	26,	2015.

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

During	2013,	we	sold	our	interest	in	Clearwire	Communications,	LLC	(Clearwire	LLC),	which	we	originally	acquired	in	2008,	for	proceeds	of	 $328	million. These	proceeds	are	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.

For	proceeds	received	and	gains	recognized	for	each	investment,	see	" Note	20:	Gains	(Losses)	on	Equity	Investments,	Net."

# Non-marketable	cost	method	investments

The	carrying	value	of	our	non-marketable	cost	method	investments	was	 $2.9	billion	as	of	December	26,	2015	($1.8	billion	as	of	December	27,	2014),	of which	$454	million	and	$966	million	related	to	our	cost	method	investments	in	Cloudera	and	Beijing	UniSpreadtrum	Technology	Ltd.	(UniSpreadtrum), respectively.	In	2015,	we	recognized	impairments	of	 $164	million	on	non-marketable	cost	method	investments,	which	is	included	within	gains	(losses)	on equity	investments,	net	on	the	consolidated	statements	of	income	($130	million	in	2014	and	$103	million	in	2013).

# Investment	in	Beijing	UniSpreadtrum	Technology	Ltd.

During	2014,	we	entered	into	a	series	of	agreements	with	Tsinghua	Unigroup	Ltd.	(Tsinghua	Unigroup),	an	operating	subsidiary	of	Tsinghua	Holdings	Co. Ltd.,	to,	among	other	things,	jointly	develop	Intel	architecture-	and	communications-based	solutions	for	phones.	We	agreed	to	invest	up	to	9.0	billion Chinese	yuan	(approximately	$1.5	billion	as	of	the	date	of	the	agreement)	for	a	minority	stake	of	approximately	 20%	of	UniSpreadtrum,	a	holding company	under	Tsinghua	Unigroup.	During	2015,	we	invested	$966	million	to	complete	the	first	phase	of	the	equity	investment.	We	have	determined	we will	not	have	significant	influence	over	the	company	and,	therefore,	we	account	for	our	interest	using	the	cost	method	of	accounting.	Subject	to	regulatory approvals	and	other	closing	conditions,	the	second	phase	of	the	investment	will	require	additional	funding	of	approximately	$500	million.

As	of	December	26,	2015,	and	December	27,	2014,	substantially	all	of	our	trading	assets	were	marketable	debt	instruments.	Net	 losses	related	to	trading assets	still	held	at	the	reporting	date	were	$152	million	in	2015	(net	losses	of	$530	million	in	2014	and	net	losses	of	$70	million	in	2013).	Net	gains	on	the related	derivatives	were	$137	million	in	2015	(net	gains	of	$525	million	in	2014	and	$86	million	in	2013).

# 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,	commodity	price	risk,	and	credit	risk.

# 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	portion	of	our	operating	expenditures	and	capital purchases	is	incurred	in	or	exposed	to	other	currencies,	primarily	the	euro,	the	Chinese	yuan,	the	Japanese	yen,	and	the	Israeli	shekel .	We	have established	balance	sheet	and	forecasted	transaction	currency	risk	management	programs	to	protect	against	fluctuations	in	the	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 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.	We	utilize	currency	interest	rate	swaps	to hedge	exposures	to	the	variability	in	the	U.S.-dollar	equivalent	of	coupon	and	principal	payments	associated	with	our	non-U.S.-dollar-denominated indebtedness.

•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.	A	substantial	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	the	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.	We	may	elect	to	swap	fixed	coupon	payments	on	our	debt	issuances	for	floating	rate	coupon	payments. 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	with	fair	value	hedge	accounting	designation	that	utilize	interest	rate	swap	agreements	to	hedge	against	changes	in	fair	value on	certain	fixed	rate	debt	due	to	fluctuations	in	the	benchmark	interest	rate.	For	these	derivatives,	we	recognize	gains	and	losses	in	interest	and	other, net,	along	with	the	offsetting	gains	and	losses	attributable	to	the	changes	in	the	benchmark	interest	rate	on	the	underlying	hedged	items.

•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	generally	reset	on	a	quarterly	basis.	Changes	in	the	fair value	of	the	debt	instruments	classified	as	trading	assets	and	loans	receivable	recognized	at	fair	value	are	generally	offset	by	changes	in	the	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	our	investments.	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	$1.3	billion	as	of	December	26,	2015	($1.2	billion	as	of December	27,	2014),	and	are	included	in	other	accrued	liabilities.

We	operate	facilities	that	consume	commodities	and	have	established	forecasted	transaction	risk	management	programs	to	protect	against	fluctuations	in the	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	may	include	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	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Currency\tforwards | $11,212 | $15,578 | $13,404 |
| Currency\tinterest\trate\tswaps | 5,509 | 5,446 | 4,377 |
| Embedded\tdebt\tderivatives | 3,600 | 3,600 | 3,600 |
| Interest\trate\tswaps | 5,212 | 1,347 | 1,377 |
| Total\treturn\tswaps | 1,061 | 1,056 | 914 |
| Other | 61 | 49 | 67 |
| Total | $26,655 | $27,076 | $23,739 |

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	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Chinese\tyuan | $2,231 | $3,097 | $1,116 |
| Euro | 6,084 | 7,486 | 6,874 |
| Israeli\tshekel | 1,674 | 2,489 | 2,244 |
| Japanese\tyen | 2,663 | 3,779 | 4,116 |
| Other | 4,069 | 4,173 | 3,431 |
| Total | $16,721 | $21,024 | $17,781 |

During	the	fourth	quarter	of	2014,	we	entered	into	 $1.5	billion	of	forward	contracts	to	hedge	our	anticipated	equity	funding	of	the	UniSpreadtrum investment.	The	hedges	were	designated	as	cash	flow	hedges	and	the	related	gains	and	losses	attributable	to	changes	in	the	spot	rates	were	recognized in	accumulated	other	comprehensive	income	(loss).	Hedge	gains	and	losses	attributable	to	changes	in	the	forward	rates	were	recognized	in	interest	and other,	net.	During	2015,	we	discontinued	cash	flow	hedge	accounting	treatment	for	$478	million	of	forward	contracts	since	we	could	no	longer	assert	that funding	is	probable	to	occur	within	the	initially	specified	timeline.	Hedge	losses	accumulated	in	other	comprehensive	income	and	subsequently	released	to interest	and	other,	net,	related	to	these	de-designated	forward	contracts	were	insignificant.

During	2015,	we	entered	into	$4.4	billion	of	interest	rate	swap	agreements	to	hedge	against	changes	in	the	fair	value	attributable	to	the	benchmark interest	rates	related	to	$4.4	billion	of	our	outstanding	senior	notes.	These	hedges	were	designated	as	fair	value	hedges.	During	2015,	we	entered	into $577	million	of	currency	interest	rate	swap	agreements	to	hedge	against	the	variability	in	the	U.S.-dollar	equivalent	of	coupon	and	principal	payments associated	with	our	non-U.S.-dollar-denominated	indebtedness.	These	hedges	were	designated	as	cash	flow	hedges.

# 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	26,	2015 | December	26,	2015 |  |  | December	27,	2014 | December	27,	2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (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 | $20 | $3 | $83 | $2 | $6 | $1 | $497 | $9 |
| Interest\trate\tswaps | — | 1 | — | 14 | — | — | — | — |
| Currency\tinterest\trate\tswaps | — | 7 | — | — | — | — | — | — |
| Total\tderivatives\tdesignated\tas\nhedging\tinstruments | 20 | 11 | 83 | 16 | 6 | 1 | 497 | 9 |
| Derivatives\tnot\tdesignated\tas\thedging\ninstruments: |  |  |  |  |  |  |  |  |
| Currency\tforwards | 20 | — | 63 | — | 207 | — | 44 | — |
| Currency\tinterest\trate\tswaps | 370 | 18 | 52 | — | 344 | 34 | 7 | — |
| Embedded\tdebt\tderivatives | — | — | — | 17 | — | — | 4 | 8 |
| Interest\trate\tswaps | 2 | — | 12 | — | 3 | — | 11 | — |
| Total\treturn\tswaps | 32 | — | 2 | — | — | — | — | — |
| Other | 1 | 11 | — | — | 1 | 22 | — | — |
| Total\tderivatives\tnot\tdesignated\tas\nhedging\tinstruments | 425 | 29 | 129 | 17 | 555 | 56 | 66 | 8 |
| Total\tderivatives | $445 | $40 | $212 | $33 | $561 | $57 | $563 | $17 |

# Amounts	Offset	in	the	Consolidated	Balance	Sheets

The	gross	amounts	of	our	derivative	instruments	and	reverse	repurchase	agreements	subject	to	master	netting	arrangements	with	various	counterparties, and	cash	and	non-cash	collateral	posted	under	such	agreements	at	the	end	of	each	period	were	as	follows:

| (In	Millions) | Gross	Amounts<br>Recognized | Gross	Amounts<br>Offset	in	the<br>Balance	Sheet | Net	Amounts<br>Presented	in	the<br>Balance	Sheet | Financial<br>Instruments | Cash	Collateral<br>Received	or<br>Pledged | Net	Amount |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets: |  |  |  |  |  |  |
| Derivative\tassets\tsubject\tto\tmaster\tnetting\narrangements | $482 | $— | $482 | $(201) | $(188) | $93 |
| Reverse\trepurchase\tagreements | 3,368 | — | 3,368 | — | (3,368) | — |
| Total\tassets | 3,850 | — | 3,850 | (201) | (3,556) | 93 |
| Liabilities: |  |  |  |  |  |  |
| Derivative\tliabilities\tsubject\tto\tmaster\tnetting\narrangements | 242 | — | 242 | (201) | (27) | 14 |
| Total\tliabilities | $242 | $— | $242 | $(201) | $(27) | $14 |

| (In	Millions) | Gross	Amounts<br>Recognized | Gross	Amounts<br>Offset	in	the<br>Balance	Sheet | Net	Amounts<br>Presented	in	the<br>Balance	Sheet | Financial<br>Instruments | Cash	Collateral<br>Received	or<br>Pledged | Net	Amount |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets: |  |  |  |  |  |  |
| Derivative\tassets\tsubject\tto\tmaster\tnetting\narrangements | $559 | $— | $559 | $(365) | $(78) | $116 |
| Reverse\trepurchase\tagreements | 718 | — | 718 | — | (718) | — |
| Total\tassets | 1,277 | — | 1,277 | (365) | (796) | 116 |
| Liabilities: |  |  |  |  |  |  |
| Derivative\tliabilities\tsubject\tto\tmaster\tnetting\narrangements | 559 | — | 559 | (365) | (80) | 114 |
| Total\tliabilities | $559 | $— | $559 | $(365) | $(80) | $114 |

We	obtain	and	secure	available	collateral	from	counterparties	against	obligations,	including	securities	lending	transactions	and	reverse	repurchase agreements,	when	we	deem	it	appropriate.

# 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:

|  |  | Gains	(Losses)<br>Recognized	in	OCI	on<br>Derivatives	(Effective	Portion) |  |
| :--- | :--- | :--- | :--- |
| Years\tEnded\n(In\tMillions) | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t28,\n2013 |
| Currency\tforwards | $(305) | $(587) | $(167) |
| Currency\tinterest\trate\tswaps\tand\tother | 7 | (2) | 1 |
| Total | $(298) | $(589) | $(166) |

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.

For	information	on	the	unrealized	holding	gains	(losses)	on	derivatives	reclassified	out	of	accumulated	other	comprehensive	income	into	the	consolidated statements	of	income,	see	"Note	24:	Other	Comprehensive	Income	(Loss)."

# Derivatives	in	Fair	Value	Hedging	Relationships

The	effects	of	derivative	instruments	designated	as	fair	value	hedges,	recognized	in	interest	and	other,	net	for	each	period	were	as	follows:

|  |  | Gains	(Losses)<br>Recognized	in	Statement	of	Income	on<br>Derivatives | Gains	(Losses)<br>Recognized	in	Statement	of	Income	on<br>Derivatives |
| :--- | :--- | :--- | :--- |
| Years\tEnded\n(In\tMillions) | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t28,\n2013 |
| Interest\trate\tswap | $(13) | $— | $— |
| Hedged\titem | 13 | — | — |
| Total | $— | $— | $— |

There	was	no	ineffectiveness	during	all	periods	presented	in	the	preceding	table.

# 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:

| Years	Ended<br>(In	Millions) | Location	of	Gains	(Losses)<br>Recognized	in	Income	on	Derivatives | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- | :--- |
| Currency\tforwards | Interest\tand\tother,\tnet | $(50) | $144 | $44 |
| Currency\tinterest\trate\tswaps | Interest\tand\tother,\tnet | 346 | 456 | 29 |
| Interest\trate\tswaps | Interest\tand\tother,\tnet | (6) | (3) | — |
| Total\treturn\tswaps | Various | (27) | 68 | 140 |
| Other | \t Gains\t(losses)\ton\tequity\tinvestments,\tnet | (11) | (6) | 6 |
| Other | Interest\tand\tother,\tnet | (2) | — | — |
| Total |  | $250 | $659 | $219 |

# 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,	reverse	repurchase	agreements,	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.	Substantially	all	of	our	investments	in	debt	instruments	are	in	 A/A2	or	better	rated issuances,	and	a	substantial	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	26,	2015,	our	total	credit	exposure	to	any single	counterparty,	excluding	money	market	funds	invested	in	U.S.	treasury	and	U.S.	agency	securities	and	reverse	repurchase	agreements collateralized	by	treasury	and	agency	securities,	did	not	exceed	$500	million.	To	further	reduce	credit	risk,	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	communications	equipment	manufacturers	in	the	computing	and	communications industries.	Hewlett-Packard	Company,	our	largest	customer	in	2014,	separated	into	HP	Inc.	and	Hewlett	Packard	Enterprise	Company	on	November	1, 2015.	These	entities,	together	with	Dell	Inc.	and	Lenovo	Group	Limited,	represent	our	largest	customers.	Collectively,	these	customers	accounted	for 46% of	net	revenue	for	2015	(46%	for	2014	and	44%	for	2013)	and	49%	of	net	accounts	receivable	as	of	 December	26,	2015	(43%	as	of	December	27,	2014). We	believe	that	the	net	accounts	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.	From	this	analysis,	we	establish	shipping and	credit	limits,	and	determine	whether	we	will	seek	to	use	one	or	more	credit	support	protection	devices,	such	as	obtaining	a	parent	guarantee,	standby letter	of	credit,	or	credit	insurance.

# Note	8:	Acquisitions

During	2015,	we	completed	eight	acquisitions	qualifying	as	business	combinations	in	exchange	for	aggregate	consideration	(net	of	cash	acquired)	of $1.0 billion,	a	substantial	majority	of	which	was	cash	consideration.	Substantially	all	of	the	consideration	was	allocated	to	goodwill	and	other	intangible	assets, such	as	acquisition-related	developed	technology	and	acquisition-related	customer	relationships.	Included	in	these	acquisitions	is	our	acquisition	of	Lantiq Semiconductor	(Lantiq),	intended	to	extend	Intel's	success	in	cable	home	gateways	into	DSL	and	fiber	markets.	We	acquired	Lantiq	in	the	second	quarter of	2015	for	net	cash	consideration	of	$345	million,	substantially	all	of	which	was	allocated	to	goodwill	and	intangible	assets,	such	as	acquisition-related developed	technology	and	acquisition-related	customer	relationships.	The	operating	results	of	Lantiq	are	included	in	our	Client	Computing	Group operating	segment.

During	2014,	we	completed	eight	acquisitions	qualifying	as	business	combinations	in	exchange	for	aggregate	consideration	of	 $963	million,	substantially all	cash	consideration.	A	substantial	majority	of	the	consideration	was	allocated	to	goodwill	and	acquisition-related	developed	technology	intangible assets.	Included	in	these	acquisitions	is	our	acquisition	of	the	Axxia	Networking	Business	(Axxia	business)	of	Avago	Technologies	Limited,	intended	to accelerate	growth	in	the	mobile	wireless	base	station	business.	We	acquired	the	Axxia	business	in	the	fourth	quarter	of	2014	for	net	cash	consideration	of $650	million,	substantially	all	of	which	was	allocated	to	goodwill	and	acquisition-related	developed	technology	intangible	assets.	The	operating	results	of the	Axxia	business	are	included	in	our	Data	Center	Group	(DCG)	operating	segment.

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),	intended	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.

Acquisitions	completed	in	2015,	2014,	and	2013,	both	individually	and	in	the	aggregate,	were	not	significant	to	our	results	of	operations.	For	information on	the	assignment	of	goodwill	to	our	operating	segments,	see	"Note	10:	Goodwill"	and	for	information	on	the	classification	of	intangible	assets,	see	" Note 11:	Identified	Intangible	Assets."

# Acquisition	of	Altera	Corporation

During	the	second	quarter	of	2015,	we	entered	into	a	definitive	agreement	to	acquire	Altera	Corporation	(Altera)	in	an	all-cash	transaction.	The	transaction closed	on	December	28,	2015,	subsequent	to	our	fiscal	2015	year-end.	Altera	is	a	global	semiconductor	company	that	designs	and	sells	programmable semiconductors	and	related	products,	including	programmable	logic	devices,	which	incorporate	field-programmable	gate	array	(FPGAs)	and	complex programmable	logic	devices,	and	highly	integrated	System-on-Chip	(SoC)	devices.	This	acquisition	is	expected	to	expand	our	reach	within	the	compute continuum,	as	the	combination	of	our	leading-edge	products	and	manufacturing	process	with	Altera's	leading	FPGA	technology	is	expected	to	enable	new classes	of	platforms	that	meet	customer	needs	in	the	data	center	and	Internet	of	Things	market	segments.

Upon	completion	of	the	acquisition,	each	outstanding	share	of	Altera	common	stock	and,	subject	to	certain	exceptions,	each	share	of	Altera	common stock	underlying	vested	stock	option	awards,	restricted	stock	unit	awards	and	performance-based	restricted	stock	unit	awards	were	converted	into	the right	to	receive	$54.00	per	share	in	cash,	without	interest.	During	the	third	and	fourth	quarters	of	2015,	we	issued	$ 9.5	billion	in	aggregate	principal amount	of	senior	unsecured	debt,	and	in	the	first	quarter	of	2016	we	borrowed	$4.0	billion	against	our	short-term	credit	facility,	in	order	to	fund	a	portion	of the	total	purchase	price	(net	of	cash	acquired)	of	$14.5	billion.	For	more	information	on	our	indebtedness,	see	" Note	15:	Borrowings."

Since	the	closing	of	this	acquisition	occurred	subsequent	to	our	fiscal	year-end,	the	allocation	of	the	purchase	price	to	the	underlying	assets	acquired	and liabilities	assumed	is	subject	to	a	formal	valuation	process,	which	has	not	yet	been	completed.	We	will	reflect	the	preliminary	valuation	of	the	net	assets acquired	and	the	operational	results	of	Altera	beginning	December	28,	2015,	the	close	date	of	the	transaction,	in	our	first	quarter	of	2016.	The	purchase price	allocation	will	be	finalized	as	soon	as	practicable	within	the	measurement	period,	but	not	later	than	one	year	following	the	acquisition	close	date.

Although	the	purchase	price	allocation	for	this	acquisition	and	pro	forma	financial	information	is	not	yet	available,	we	expect	a	substantial	majority	of	the purchase	price	will	be	allocated	to	goodwill	and	acquisition-related	developed	technology	and	other	identified	intangible	assets.	Additionally,	we	assumed $1.5	billion	of	aggregate	principal	amount	of	Altera's	outstanding	indentures.	Altera	became	a	new	Intel	operating	segment	called	the	Programmable Solutions	Group	upon	acquisition.

# Note	9:	Divestitures

In	2015,	we	completed	three	separate	divestiture	transactions.	As	a	result	of	these	transactions,	we	received	aggregate	net	cash	consideration	of $153 million,	included	within	investing	activities	on	the	consolidated	statements	of	cash	flows,	and	recognized	a	gain	within	interest	and	other,	net	on	the consolidated	statements	of	income.

During	the	first	quarter	of	2014,	we	completed	the	divestiture	of	the	assets	of	Intel	Media,	a	business	division	dedicated	to	the	development	of	cloud	TV products	and	services,	to	Verizon	Communications	Inc.	As	a	result	of	the	transaction,	we	received	aggregate	net	cash	consideration	of	$150	million, included	within	investing	activities	on	the	consolidated	statements	of	cash	flows,	and	recognized	a	gain	within	interest	and	other,	net	on	the	consolidated statements	of	income.

# Note	10:	Goodwill

Goodwill	activity	for	each	period	was	as	follows:

| (In	Millions) | Dec	27,<br>2014 | Acquisitions | Currency	Exchange<br>and	Other | Dec	26,<br>2015 |
| :--- | :--- | :--- | :--- | :--- |
| Client\tComputing\tGroup | $3,708 | $370 | $— | $4,078 |
| Data\tCenter\tGroup | 2,376 | 28 | — | 2,404 |
| Internet\tof\tThings\tGroup | 428 | — | — | 428 |
| Software\tand\tservices\toperating\tsegments | 4,236 | 10 | (206) | 4,040 |
| All\tother | 113 | 269 | — | 382 |
| Total | $10,861 | $677 | $(206) | $11,332 |

| (In	Millions) | Dec	28,<br>2013 | Acquisitions | Currency	Exchange<br>and	Other | Dec	27,<br>2014 |
| :--- | :--- | :--- | :--- | :--- |
| Client\tComputing\tGroup | $3,689 | $19 | $— | $3,708 |
| Data\tCenter\tGroup | 1,969 | 407 | — | 2,376 |
| Internet\tof\tThings\tGroup | 428 | — | — | 428 |
| Software\tand\tservices\toperating\tsegments | 4,409 | 41 | (214) | 4,236 |
| All\tother | 18 | 113 | (18) | 113 |
| Total | $10,513 | $580 | $(232) | $10,861 |

During	the	first	quarter	of	2015,	we	combined	the	PC	Client	Group	and	Mobile	and	Communications	Group	to	create	the	Client	Computing	Group	(CCG). All	prior-period	amounts	have	been	retrospectively	adjusted	to	reflect	this	organizational	structure.	For	further	information,	see	"Note	26:	Operating Segments	and	Geographic	Information."

During	the	fourth	quarters	of	2015,	2014,	and	2013,	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	26,	2015	were	$719	million:	$365	million	associated	with	CCG,	$275	million associated	with	DCG,	and	$79	million	associated	with	the	Internet	of	Things	Group.

# Note	11:	Identified	Intangible	Assets

Identified	intangible	assets	at	the	end	of	each	period	were	as	follows:

|  |  | December	26,	2015 |  |
| :--- | :--- | :--- | :--- |
| (In\tMillions) | Gross\nAssets | Accumulated\nAmortization | Net |
| Acquisition-related\tdeveloped\ttechnology | $2,928 | $(2,276) | $652 |
| Acquisition-related\tcustomer\trelationships | 1,738 | (1,219) | 519 |
| Acquisition-related\tbrands | 59 | (55) | 4 |
| Licensed\ttechnology\tand\tpatents | 3,017 | (1,200) | 1,817 |
| Identified\tintangible\tassets\tsubject\tto\tamortization | 7,742 | (4,750) | 2,992 |
| Acquisition-related\tbrands | 767 | — | 767 |
| Other\tintangible\tassets | 174 | — | 174 |
| Identified\tintangible\tassets\tnot\tsubject\tto\tamortization | 941 | — | 941 |
| Total\tidentified\tintangible\tassets | $8,683 | $(4,750) | $3,933 |

|  |  | December	27,	2014 |  |
| :--- | :--- | :--- | :--- |
| (In\tMillions) | Gross\nAssets | Accumulated\nAmortization | Net |
| Acquisition-related\tdeveloped\ttechnology | $3,009 | $(2,192) | $817 |
| Acquisition-related\tcustomer\trelationships | 1,698 | (1,001) | 697 |
| Acquisition-related\tbrands | 61 | (49) | 12 |
| Licensed\ttechnology\tand\tpatents | 3,153 | (1,224) | 1,929 |
| Identified\tintangible\tassets\tsubject\tto\tamortization | 7,921 | (4,466) | 3,455 |
| Acquisition-related\tbrands | 788 | — | 788 |
| Other\tintangible\tassets | 203 | — | 203 |
| Identified\tintangible\tassets\tnot\tsubject\tto\tamortization | 991 | — | 991 |
| Total\tidentified\tintangible\tassets | $8,912 | $(4,466) | $4,446 |

As	a	result	of	our	acquisitions	and	purchases	of	licensed	technology	and	patents,	identified	intangible	assets	recorded	for	each	period	and	their	respective estimated	weighted	average	useful	life	were	as	follows:

|  | Gross<br>Assets<br>(In	Millions) | Estimated	Useful<br>Life<br>(In	Years) | Gross<br>Assets<br>(In	Millions) | Estimated	Useful<br>Life<br>(In	Years) |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Acquisition-related\tdeveloped\ttechnology | $238 | 6 | $175 |  | 6 |
| Acquisition-related\tcustomer\trelationships | $110 | 11 | $79 |  | 9 |
| Licensed\ttechnology\tand\tpatents | $176 | 7 | $93 |  | 8 |

All	intangible	assets	acquired	during	2015	are	subject	to	amortization.	During	2014,	we	acquired	other	intangible	assets	of $197	million	that	were	not subject	to	amortization.

Amortization	expenses,	with	presentation	location	on	the	consolidated	statements	of	income,	for	each	period	were	as	follows:

| Years	Ended<br>(In	Millions) | Location | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- | :--- |
| Acquisition-related\tdeveloped\ttechnology | \t Cost\tof\tsales | $343 | $600 | $576 |
| Acquisition-related\tcustomer\trelationships | Amortization\tof\tacquisition-related\tintangibles | 258 | 284 | 279 |
| Acquisition-related\tbrands | Amortization\tof\tacquisition-related\tintangibles | 7 | 10 | 12 |
| Licensed\ttechnology\tand\tpatents | \t Cost\tof\tsales | 282 | 275 | 272 |
| Other\tintangible\tassets | Reduction\tof\trevenue |  |  |  |
|  |  | — | — | 103 |
| Total\tamortization\texpenses |  | $890 | $1,169 | $1,242 |

Based	on	identified	intangible	assets	that	are	subject	to	amortization	as	of December	26,	2015	(which	do	not	include	intangibles	from	the	Altera acquisition),	we	expect	future	amortization	expense	for	each	period	to	be	as	follows:

| (In	Millions) | 2016 | 2017 | 2018 | 2019 | 2020 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Acquisition-related\tdeveloped\ttechnology | $260 | $115 | $101 | $98 | $64 |
| Acquisition-related\tcustomer\trelationships | 229 | 143 | 42 | 25 | 22 |
| Acquisition-related\tbrands | 3 | — | — | — | — |
| Licensed\ttechnology\tand\tpatents | 282 | 239 | 187 | 186 | 174 |
| Total\tfuture\tamortization\texpenses | $774 | $497 | $330 | $309 | $260 |

# Note	12:	Other	Long-Term	Assets

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

| (In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- |
| Equity\tmethod\tinvestments | $1,590 | $1,446 |
| Non-marketable\tcost\tmethod\tinvestments | 2,933 | 1,769 |
| Non-current\tdeferred\ttax\tassets | 600 | 622 |
| Pre-payments\tfor\tproperty,\tplant\tand\tequipment | 623 | 636 |
| Loans\treceivable | 642 | 416 |
| Grants\treceivable | 318 | 312 |
| Reverse\trepurchase\tagreements | 350 | 350 |
| Other | 679 | 954 |
| Total\tother\tlong-term\tassets | $7,735 | $6,505 |

As	of	December	26,	2015,	the	carrying	amount	of	our	non-marketable	cost	method	investments	includes	 $966	million	related	to	our	investment	in UniSpreadtrum.	For	further	information,	see	"Note	5:	Cash	and	Investments."

During	2015,	we	received	and	transferred	 $213	million	of	equipment	from	pre-payments	for	property,	plant	and	equipment	to	property,	plant	and equipment.	Substantially	all	of	the	equipment	was	prepaid	in	 2012	and	2013.	We	recognized	the	pre-payments	within	operating	activities	in	the consolidated	statement	of	cash	flows	when	we	paid	for	the	equipment,	and	the	receipt	of	the	equipment	is	reflected	as	a	non-cash	transaction	in	the current	period.

# Note	13:	Restructuring	and	Asset	Impairment	Charges

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| 2015\trestructuring\tprogram | $264 | $— | $— |
| 2013\trestructuring\tprogram | 90 | 295 | 240 |
| Total\trestructuring\tand\tasset\timpairment\tcharges | $354 | $295 | $240 |

# 2015	Restructuring	Program

Beginning	in	the	second	quarter	of	2015,	management	approved	and	commenced	implementation	of	restructuring	actions,	primarily	targeted	workforce reductions,	as	we	adjusted	resources	from	areas	of	disinvestment	to	areas	of	investment.	This	program	was	substantially	complete	by	the	end	of	the 2015.

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 |
| :--- | :--- |
| Employee\tseverance\tand\tbenefit\tarrangements | $250 |
| Asset\timpairments\tand\tother\trestructuring\tcharges | 14 |
| Total\trestructuring\tand\tasset\timpairment\tcharges | $264 |

Restructuring	actions	related	to	this	program	that	were	approved	in	2015	impacted	approximately 	4,000	employees.

Beginning	in	the	third	quarter	of	2013,	management	approved	and	commenced	implementation	of	several	restructuring	actions,	including	targeted workforce	reductions	and	the	exit	of	certain	businesses	and	facilities.	These	actions	include	the	wind	down	of	our	200mm	wafer	fabrication	facility	in Massachusetts,	which	ceased	production	in	the	first	quarter	of	2015,	and	the	closure	of	our	assembly	and	test	facility	in	Costa	Rica,	which	ceased production	in	the	fourth	quarter	of	2014.	These	targeted	reductions	will	enable	us	to	better	align	our	resources	in	areas	providing	the	greatest	benefit	in the	current	business	environment.	This	program	was	substantially	complete	by	the	end	of	2015.

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Employee\tseverance\tand\tbenefit\tarrangements | $82 | $265 | $201 |
| Asset\timpairments\tand\tother\trestructuring\tcharges | 8 | 30 | 39 |
| Total\trestructuring\tand\tasset\timpairment\tcharges | $90 | $295 | $240 |

Restructuring	actions	related	to	this	program	that	were	approved	in	 2015	impacted	approximately	940	employees.	Since	the	third	quarter	of	2013,	we have	incurred	a	total	of	$625	million	in	restructuring	and	asset	impairment	charges.	These	charges	include	 $548	million	related	to	employee	severance and	benefit	arrangements	for	approximately	8,500	employees,	and	$77	million	in	asset	impairment	charges	and	other	restructuring	charges.

# Note	14:	Deferred	Income

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

| (In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- |
| Deferred\tincome\ton\tshipments\tof\tcomponents\tto\tdistributors | $920 | $944 |
| Deferred\tincome\tfrom\tsoftware,\tservices,\tand\tother | 1,268 | 1,261 |
| Current\tdeferred\tincome | 2,188 | 2,205 |
| Non-current\tdeferred\tincome\tfrom\tsoftware,\tservices,\tand\tother | 530 | 483 |
| Total\tdeferred\tincome | $2,718 | $2,688 |

We	classify	non-current	deferred	income	from	software,	services,	and	other	within	other	long-term	liabilities	on	the	consolidated	balance	sheets.

# Note	15:	Borrowings

# Short-Term	Debt

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

| (In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- |
| Drafts\tpayable | $41 | $16 |
| Commercial\tpaper | — | 500 |
| Current\tportion\tof\tlong-term\tdebt | 2,602 | 1,088 |
| Less:\tdebt\tissuance\tcosts\tassociated\twith\tthe\tcurrent\tportion\tof\tlong-term\tdebt | (9) | (8) |
| Total\tshort-term\tdebt | $2,634 | $1,596 |
| We\thave\tan\tongoing\tauthorization\tfrom\tour\tBoard\tof\tDirectors\tto\tborrow\tup\tto\t $5.0\tbillion,\twhich\tour\tBoard\tof\tDirectors\tincreased\tin\t2015\tfrom | We\thave\tan\tongoing\tauthorization\tfrom\tour\tBoard\tof\tDirectors\tto\tborrow\tup\tto\t $5.0\tbillion,\twhich\tour\tBoard\tof\tDirectors\tincreased\tin\t2015\tfrom | $3.0 |

On	December	21,	2015	we	entered	into	a	short-term	credit	facility	to	borrow	up	to	 $5.0	billion	in	order	to	facilitate	the	settlement	of	our	acquisition	of Altera.	There	were	no	borrowings	outstanding	under	this	credit	facility	as	of	 December	26,	2015	and	it	was	closed	in	January	2016.

# Long-Term	Debt

Our	indebtedness	is	carried	at	amortized	cost	plus	applicable	hedge	adjustments.	Our	long-term	debt	at	the	end	of	each	period	was	as	follows:

| (In	Millions) | Maturity	Date | Stated	Interest<br>Rate | Dec	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- | :--- | :--- |
| Fourth\tquarter\t2015\tdebt\tissuance\tof\t$915\tmillion |  |  |  |  |
| Senior\tnotes | December\t2045 | 4.70% | $908 | $— |
| Fourth\tquarter\t2015\tAustralian\tdollar-denominated\tdebt\tissuance\tof\nA$800\tmillion |  |  |  |  |
| Senior\tnotes1 | December\t2019 | 3.25% | 181 | — |
| Senior\tnotes1 | December\t2022 | 4.00% | 397 | — |
| Third\tquarter\t2015\tdebt\tissuance\tof\t$1.0\tbillion |  |  |  |  |
| Senior\tnotes | August\t2045 | 4.90% | 1,009 | — |
| Third\tquarter\t2015\tdebt\tissuance\tof\t$7.0\tbillion |  |  |  |  |
| Senior\tnotes | July\t2020 | 2.45% | 1,748 | — |
| Senior\tnotes | July\t2022 | 3.10% | 996 | — |
| Senior\tnotes | July\t2025 | 3.70% | 2,247 | — |
| Senior\tnotes | July\t2045 | 4.90% | 1,998 | — |
| 2012\tdebt\tissuance\tof\t$6.2\tbillion |  |  |  |  |
| Senior\tnotes | December\t2017 | 1.35% | 2,999 | 2,998 |
| Senior\tnotes | December\t2022 | 2.70% | 1,492 | 1,495 |
| Senior\tnotes | December\t2032 | 4.00% | 744 | 744 |
| Senior\tnotes | December\t2042 | 4.25% | 924 | 924 |
| 2011\tdebt\tissuance\tof\t$5.0\tbillion |  |  |  |  |
| Senior\tnotes | October\t2016 | 1.95% | 1,499 | 1,499 |
| Senior\tnotes | October\t2021 | 3.30% | 1,997 | 1,997 |
| Senior\tnotes | October\t2041 | 4.80% | 1,490 | 1,490 |
| 2009\tdebt\tissuance\tof\t$2.0\tbillion |  |  |  |  |
| Junior\tsubordinated\tconvertible\tdebentures | August\t2039 | 3.25% | 1,103 | 1,088 |
| 2005\tdebt\tissuance\tof\t$1.6\tbillion |  |  |  |  |
| Junior\tsubordinated\tconvertible\tdebentures | December\t2035 | 2.95% | 975 | 960 |
| Long-term\tdebt |  |  | 22,707 | 13,195 |
| Less:\tcurrent\tportion\tof\tlong-term\tdebt |  |  | (2,602) | (1,088) |
| Less:\tdebt\tissuance\tcosts |  |  | (69) | (48) |
| Total\tlong-term\tdebt |  |  | $20,036 | $12,059 |

1	 To	manage	foreign	currency	risk	associated	with	the	Australian-dollar-denominated	notes	issued	in	2015,	we	entered	into	currency	interest	rate swaps	with	an	aggregate	notional	amount	of	$577	million,	which	effectively	converted	these	notes	to	U.S.-dollar-denominated	notes.	For	further discussion	on	our	currency	interest	rate	swaps,	see	"Note	6:	Derivative	Financial	Instruments."

# Senior	Notes

During	2015,	we	issued	a	total	of	 $9.5	billion	aggregate	principal	amount	of	senior	unsecured	notes	to	fund	a	portion	of	the	cash	consideration	for	our acquisition	of	Altera.	The	acquisition	of	Altera	closed	on	December	28,	2015,	subsequent	to	our	fiscal	2015	year-end.	For	more	information	on	the	closing of	our	Altera	acquisition,	see	"Note	8:	Acquisitions."

All	of	our	senior	notes	pay	a	fixed	rate	of	interest	semiannually.	A	portion	of	our	fixed	coupon	payments	related	to	our	senior	notes	have	been	swapped	for floating	rate	coupon	payments.	For	more	information	on	our	interest	rate	swaps,	see	"Note	6:	Derivative	Financial	Instruments."	We	may	redeem	the	notes prior	to	their	maturity	at	our	option	at	specified	redemption	prices	and	subject	to	certain	restrictions.	The	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	and	2005,	we	issued	junior	subordinated	convertible	debentures	due	2039	(2009	debentures)	and	2035	(2005	debentures),	respectively.	Both	the 2009	and	2005	debentures	pay	a	fixed	rate	of	interest	semiannually.

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

2009	Debentures.	The	2009	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.	After	such	date,	if	the	10-day	average	trading	price	of	$1,000	principal	amount	of	the	bond	immediately preceding	any	six-month	interest	period	is	less	than	or	equal	to	 $650	or	greater	than	or	equal	to	 $1,500,	we	are	required	to	pay	contingent	 0.25%	or 0.50%	annual	interest,	respectively.	The	fair	value	of	the	related	contingent	interest	embedded	derivative	was	 $13	million	as	of	December	26,	2015	($8 million	as	of	December	27,	2014).

The	2009	debentures	are	convertible,	subject	to	certain	conditions.	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.	We	will	settle	any	conversion	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.	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.	In	addition,	if	certain	events	occur	in	the	future, the	indentures	governing	the	2009	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.	The	2009	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	the	2009	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	derivative	liabilities.

2005	Debentures.	The	2005	debentures	have	a	contingent	interest	component	that	requires	us	to	pay	interest	based	on	certain	thresholds	or	for	certain events.	If	the	10-day	average	trading	price	of	$1,000	principal	amount	of	the	bond	immediately	preceding	any	 six-month	interest	period	is	less	than	or equal	to	$800	or	greater	than	or	equal	to	 $1,300,	we	are	required	to	pay	contingent	 0.25%	or	0.40%	annual	interest,	respectively.	As	of	December	26, 2015,	we	did	not	meet	either	contingent	interest	threshold.	The	fair	value	of	the	related	contingent	interest	embedded	derivative	was	 $4	million	as	of December	26,	2015	($4	million	as	of	December	27,	2014).

The	2005	debentures	are	convertible	into	shares	of	our	common	stock.	Holders	can	surrender	the	2005	debentures	for	conversion	at	any	time.	We	can settle	any	conversion	of	the	2005	debentures	in	cash	or	stock	at	our	option.	The	2005	debentures	will	become	redeemable	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. Once	this	condition	has	been	met,	we	can	redeem,	for	cash,	all	or	part	of	the	2005	debentures	for	the	principal	amount,	plus	any	accrued	and	unpaid interest.	In	addition,	if	certain	events	occur	in	the	future,	the	indentures	governing	the	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.	The	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	the	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	derivative	liabilities.

|  | 2009	Debentures | 2009	Debentures | 2005	Debentures | 2005	Debentures |
| :--- | :--- | :--- | :--- | :--- |
| (In\tMillions,\tExcept\tPer\tShare\tAmounts) | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 |
| Outstanding\tprincipal | $2,000 | $2,000 | $1,600 | $1,600 |
| Equity\tcomponent\t(including\ttemporary\tequity)\tcarrying\tamount | $613 | $613 | $466 | $466 |
| Unamortized\tdiscount | $897 | $912 | $625 | $640 |
| Net\tdebt\tcarrying\tamount | $1,103 | $1,088 | $975 | $960 |
| Conversion\trate\t(shares\tof\tcommon\tstock\tper\t$1,000\tprincipal\tamount\tof\ndebentures) | 46.58 | 46.06 | 35.82 | 34.95 |
| Effective\tconversion\tprice\t(per\tshare\tof\tcommon\tstock) | $21.47 | $21.71 | $27.92 | $28.61 |

In	the	preceding	table,	the	remaining	amortization	periods	for	the	unamortized	discounts	for	the	2009	and	2005	debentures	are	approximately 24	and	20 years,	respectively,	as	of	December	26,	2015.

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.

During	the	fourth	quarter	of	2015,	the	closing	stock	price	conversion	right	condition	of	the	2009	debentures	continued	to	be	met	and	the	debentures	will be	convertible	at	the	option	of	the	holders	during	the	first	quarter	of	2016.	As	a	result,	the	$1.1	billion	carrying	amount	of	the	2009	debentures	was classified	as	short-term	debt	on	our	consolidated	balance	sheet	as	of	December	26,	2015	($1.1	billion	as	of	December	27,	2014).	The	excess	of	the amount	of	cash	payable	if	converted	over	the	carrying	amount	of	the	2009	debentures	of	$897	million	has	been	classified	as	temporary	equity	on	our consolidated	balance	sheet	as	of	December	26,	2015	($912	million	as	of	December	27,	2014).	In	future	periods,	if	the	closing	stock	price	conversion	right condition	is	no	longer	met,	all	outstanding	2009	debentures	would	be	reclassified	to	long-term	debt	and	the	temporary	equity	would	be	reclassified	to stockholders'	equity	on	our	consolidated	balance	sheet.

| (In	Millions) |  |
| :--- | :--- |
| 2016 | $1,500 |
| 2017 | 3,000 |
| 2018 | — |
| 2019 | 181 |
| 2020 | 1,750 |
| 2021\tand\tthereafter | 17,845 |
| Total | $24,276 |

In	the	preceding	table,	the	2009	debentures	are	 classified	based	on	their	stated	maturity	date,	regardless	of	their	classification	on	the	consolidated balance	sheet.

# Note	16:	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.	Employees	hired	on	or after	January	1,	2011	receive	discretionary	employer	contributions	in	the	Intel	401(k)	Savings	Plan,	which	are	participant-directed.	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.	Effective	January	1,	2015,	the	U.S.	Intel Retirement	Contribution	plan	assets	and	future	discretionary	employer	contributions	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	employees	to	defer	a	portion	of	compensation	in addition	to	their	Intel	401(k)	Savings	Plan	deferrals.	This	plan	is	unfunded.

We	expensed	$337	million	for	the	qualified	and	non-qualified	U.S.	retirement	contribution	plans	in	 2015	($286	million	in	2014	and	$298	million	in	2013).	In the	first	quarter	of	2016,	we	funded	$318	million	for	the	2015	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.	Beginning	on	January	1,	2015,	future	benefit	accruals	in	the	U.S.	Intel Minimum	Pension	Plan	were	frozen	to	all	employees	at	or	above	a	specific	grade	level,	and	generally	covering	all	highly	compensated	employees	in	the plan.	Starting	in	2016,	the	impacted	employees	will	receive	discretionary	employer	contributions	in	the	Intel	401(k)	Savings	Plan,	instead	of	the	Retirement Contribution	plan.	This	change	was	contingent	on	receiving	a	favorable	private	letter	ruling	from	the	U.S.	Internal	Revenue	Service	(IRS),	which	we received	in	October	2014.	As	a	result,	our	projected	benefit	obligation	was	reduced	by	$1.1	billion	in	2014,	most	of	which	was	also	included	as	a	change in	actuarial	valuation	on	the	consolidated	statements	of	comprehensive	income.

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,	and	Germany. 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.	The	Ireland	pension	plan	and	one	of	our	Germany	pension	plans	were	closed to	employees	hired	on	or	after	June	20,	2012	and	January	1,	2014,	respectively.

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.	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	in	amounts	sufficient	to	meet	the	minimum	requirements	of	applicable	local	laws	and regulations.	Additional	funding	may	be	provided	as	deemed	appropriate.	Funding	for	the	U.S.	postretirement	medical	benefits	plan	is	discretionary	under applicable	laws	and	regulations,	and	is	reviewed	annually;	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	vested	benefit	obligation	for	a	defined	benefit	pension	plan	is	the	actuarial	present	value	of	the	vested	benefits	to	which	the	employee	is	currently entitled	based	on	the	employee's	expected	date	of	separation	or	retirement.	The	changes	in	the	projected	benefit	obligations	and	plan	assets	at	the	end	of each	period	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 | U.S.	Postretirement<br>Medical	Benefits |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (In\tMillions) | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 |
| Beginning\tprojected\tbenefit\tobligation | $892 | $1,137 | $2,423 | $1,695 | $546 | $509 |
| Service\tcost | 18 | 88 | 128 | 104 | 30 | 26 |
| Interest\tcost | 33 | 49 | 63 | 66 | 21 | 23 |
| Actuarial\t(gain)\tloss | 126 | 760 | (250) | 767 | (21) | 10 |
| Currency\texchange\trate\tchanges | — | — | (190) | (254) | — | — |
| Plan\tcurtailments | — | (1,083) | — | — | — | — |
| Other | (79) | (59) | (34) | 45 | (16) | (22) |
| Ending\tprojected\tbenefit\tobligation | $990 | $892 | $2,140 | $2,423 | $560 | $546 |

|  | 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) | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 |
| Beginning\tfair\tvalue\tof\tplan\tassets | $623 | $649 | $1,017 | $1,005 | $427 | $395 |
| Actual\treturn\ton\tplan\tassets | (4) | 30 | 42 | 80 | 6 | 33 |
| Employer\tcontributions | 90 | — | 72 | 73 | 1 | — |
| Currency\texchange\trate\tchanges | — | — | (66) | (114) | — | — |
| Other | (82) | (56) | (54) | (27) | (24) | (1) |
| Ending\tfair\tvalue\tof\tplan\tassets | $627 | $623 | $1,011 | $1,017 | $410 | $427 |

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\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 |
| Other\tlong-term\tassets | $— | $— | $15 | $14 | $— | $— |
| Other\tlong-term\tliabilities | (363) | (269) | (1,144) | (1,420) | (150) | (119) |
| Accumulated\tother\tcomprehensive\tloss\t(income),\tbefore\ttax | 158 | 1 | 908 | 1,217 | 39 | 33 |
| Net\tamount\trecognized | $(205) | $(268) | $(221) | $(189) | $(111) | $(86) |

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

|  | U.S.	Pension	Benefits |  | Non-U.S.	Pension<br>Benefits |  | U.S.	Postretirement<br>Medical	Benefits | U.S.	Postretirement<br>Medical	Benefits |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Years\tEnded\n(In\tMillions) | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 |
| Net\tprior\tservice\tcredit\t(cost) | $— | $— | $(12) | $(13) | $(43) | $(48) |
| Net\tactuarial\tgain\t(loss) | (158) | (1) | (896) | (1,204) | 4 | 15 |
| Accumulated\tother\tcomprehensive\tincome\t(loss),\nbefore\ttax | $(158) | $(1) | $(908) | $(1,217) | $(39) | $(33) |

We	use	a	corridor	approach	to	amortize	actuarial	gains	and	losses.	Under	this	approach,	net	actuarial	gains	or	losses	in	excess	of	10%	of	the	larger	of the	projected	benefit	obligation	or	the	fair	value	of	plan	assets	are	amortized	on	a	straight-line	basis.	The	period	of	amortization	is	the	average	remaining service	of	active	participants	who	are	expected	to	receive	benefits	under	the	plans.

As	of	December	26,	2015,	the	accumulated	benefit	obligation	was	 $899	million	for	the	U.S.	Intel	Minimum	Pension	Plan	( $808	million	as	of	December	27, 2014)	and	$1.6	billion	for	the	non-U.S.	defined-benefit	pension	plans	($1.7	billion	as	of	December	27,	2014).	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\t26,\n2015 | Dec\t27,\n2014 | Dec\t26,\n2015 | Dec\t27,\n2014 |
| Plans\twith\taccumulated\tbenefit\tobligations\tin\texcess\tof\tplan\tassets: |  |  |  |  |
| Accumulated\tbenefit\tobligations | $899 | $808 | $1,239 | $1,344 |
| Plan\tassets | $627 | $623 | $645 | $616 |
| Plans\twith\tprojected\tbenefit\tobligations\tin\texcess\tof\tplan\tassets: |  |  |  |  |
| Projected\tbenefit\tobligations | $990 | $892 | $2,079 | $2,361 |
| Plan\tassets | $627 | $623 | $934 | $941 |

On	a	worldwide	basis,	our	pension	and	postretirement	benefit	plans	were	 55%	funded	as	of	December	26,	2015.	The	U.S.	Intel	Minimum	Pension	Plan, which	accounts	for	27%	of	the	worldwide	pension	and	postretirement	benefit	obligations,	was	 63%	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	decrease	in	the	U.S.	net	periodic	pension	benefit	cost	in	2014	compared	to	2013	is	primarily	attributed	to	the	one-time	curtailment	gain	related	to	the freeze	of	future	benefit	accruals	and	lower	recognized	net	actuarial	losses.

# 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	help	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	were	55%	for	equity	investments	and	45%	for	fixed-income	investments	in	2015.	For	2016,	the	expected	long-term	rate	of	return for	the	U.S.	Intel	Minimum	Pension	Plan	assets	is	5.6%.

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:

| (In	Millions) | Level	1 | Level	2 | Level	3 | Total | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Equity\tsecurities | $54 | $314 | $— | $368 | $347 |
| Fixed\tincome | 16 | 201 | 38 | 255 | 254 |
| Other\tinvestments | 4 | — | — | 4 | 20 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $74 | $515 | $38 | $627 | $621 |
| Cash |  |  |  | — | 2 |
| Total\tU.S.\tpension\tplan\tassets\tat\tfair\tvalue |  |  |  | $627 | $623 |

A	substantial	majority	of	the	fixed	income	investments	in	the	preceding	table	are	asset-backed	securities,	corporate	debt,	and	government	debt. Government	debt	includes	instruments	such	as	non-U.S.	government	securities,	U.S.	agency	securities,	and	U.S.	treasury	securities.

# Non-U.S.	Plan	Assets

The	investments	of	the	non-U.S.	plans	are	managed	by	insurance	companies,	pension	funds,	or	third-party	trustees,	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	equity	investments	and	fixed- income	investments,	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	help	ensure	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	50%	equity	investments	and	50%	fixed-income	investments. For	2016,	the	average	expected	long-term	rate	of	return	for	the	non-U.S.	plan	assets	is 5.3%.

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:

| (In	Millions) | Level	1 | Level	2 | Level	3 | Total | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Equity\tsecurities | $274 | $56 | $15 | $345 | $521 |
| Fixed\tincome | — | 610 | 34 | 644 | 476 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $274 | $666 | $49 | $989 | $997 |
| Cash |  |  |  | 22 | 20 |
| Total\tnon-U.S.\tplan\tassets\tat\tfair\tvalue |  |  |  | $1,011 | $1,017 |

Substantially	all	of	the	equity	investments	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	investments	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	33%	of	total	non-U.S.	plan	assets	as	of	 December	26,	2015 (35%	as	of	December	27,	2014).

# 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.	The	assets	are	invested	solely	in	a	tax-aware	global	equity	portfolio,	which	is	actively	managed	by	an	external	investment manager.	The	tax-aware	global	equity	portfolio	is	composed	of	a	diversified	mix	of	equities	in	developed	countries,	including	the	U.S.,	and	emerging markets	throughout	the	world.	For	2016,	the	expected	long-term	rate	of	return	for	the	U.S.	postretirement	medical	benefits	plan	assets	is	 7%.	As	of December	26,	2015,	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	credit,	liquidity,	and	market	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	counterparties,	instruments,	and	markets.	As	of	December	26,	2015,	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,	we	are	required	to	contribute	a	minimum	of	approximately $10	million	during	2016.	Our expected	required	funding	for	the	non-U.S.	plans	during	2016	is	approximately	$58	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 |
| :--- | :--- | :--- | :--- |
| 2016 | $57 | $26 | $19 |
| 2017 | $61 | $28 | $21 |
| 2018 | $69 | $31 | $24 |
| 2019 | $70 | $34 | $27 |
| 2020 | $70 | $37 | $31 |
| 2021-2025 | $362 | $251 | $214 |

# Note	17:	Commitments

A	portion	of	our	capital	equipment	and	certain	facilities	are	under	operating	leases	that	expire	at	various	dates	through	 2030.	Additionally,	portions	of	our real	property	are	under	leases	that	expire	at	various	dates	through	2062.	Rental	expense	was	$253	million	in	2015	($257	million	in	2014	and	$270	million in	2013).

| Minimum	rental	commitments	under	all	non-cancelable	leases	with	an	initial	term	in	excess	of	one	year	were	as	follows	as	of | December	26,	2015: |
| :--- | :--- |
| (In\tMillions) |  |
| 2016 | $234 |
| 2017 | 209 |
| 2018 | 167 |
| 2019 | 144 |
| 2020 | 120 |
| 2021\tand\tthereafter | 326 |
| Total | $1,200 |

Commitments	for	construction	or	purchase	of	property,	plant	and	equipment	totaled	 $5.7	billion	as	of	December	26,	2015	($3.5	billion	as	of	December	27, 2014),	a	majority	of	which	will	be	due	within	the	next	12	months.	Other	purchase	obligations	and	commitments	totaled	approximately	 $4.0	billion	as	of December	26,	2015	(approximately	$2.5	billion	as	of	December	27,	2014).	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	Holding	N.V.	(ASML)	intended	to	accelerate	the	development	of	extreme	ultraviolet lithography	projects	and	deep	ultraviolet	immersion	lithography	projects,	including	generic	developments	applicable	to	both	300mm	and	450mm.	Certain of	these	agreements	were	amended	in	2014.	Under	the	amended	agreements,	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	€367	million,	or	$403	million,	as	of	December	26,	2015.	As	our	obligation	is	contingent	upon	ASML	achieving	certain milestones,	we	have	excluded	this	obligation	from	other	purchase	obligations	and	commitments.

# Note	18:	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	2015,	stockholders	approved	an	extension	of	the	expiration	date	of	the	2006	Equity	Incentive	Plan	(the	2006	Plan)	to	June	2018	and	approved	an additional	34	million	shares	for	issuance.	Under	the	2006	Plan,	 753	million	shares	of	common	stock	are	available	for	issuance	as	equity	awards	to employees	and	non-employee	directors	through	June	2018.	As	of	December	26,	2015,	258.4	million	shares	of	common	stock	remained	available	for issuance	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	of	common	stock	under	those	plans.	The	stock	options	and	RSUs	assumed	generally	retain	their	terms	and	conditions	as they	were	originally	granted.

We	grant	restricted	stock	units	with	both	a	market	condition	and	a	service	condition	(market-based	restricted	stock	units),	referred	to	in	our	 2015	Proxy Statement	as	outperformance	stock	units	(OSUs),	to	a	group	of	senior	officers,	employees,	and	non-employee	directors.	For	OSUs	granted	in	2015,	the number	of	shares	of	our	common	stock	to	be	received	at	vesting	will	range	from	0%	to	200%	of	the	target	amount,	based	on	total	stockholder	return (TSR)	on	our	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	26,	2015,	4.7	million	OSUs	were	outstanding.	These	OSUs	accrue dividend	equivalents	and	generally	vest	three	years	and	one	month	from	the	grant	date.	RSU	and	option	awards	generally	vest	over	four	years	from	the grant	date.	Stock	options	generally	expire	seven	years	from	the	date	of	grant.

In	May	2015,	stockholders	approved	an	extension	of	the	expiration	date	of	the	2006	Stock	Purchase	Plan	to	August	2021.	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.	Under	the	2006	Stock Purchase	Plan,	373	million	shares	of	common	stock	are	available	for	issuance	through	August	2021.	As	of	 December	26,	2015,	181.3	million	shares	of common	stock	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	rate	adjustments	in	all	periods	presented	was	not	significant.

The	total	share-based	compensation	cost	capitalized	as	part	of	inventory	as	of	 December	26,	2015	was	$49	million	($39	million	as	of	December	27,	2014 and	$38	million	as	of	December	28,	2013).	During	2015,	the	tax	benefit	that	we	realized	for	the	tax	deduction	from	share-based	awards	totaled $533 million	($555	million	in	2014	and	$385	million	in	2013).

We	estimate	the	fair	value	of	RSUs	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	shares	of	common	stock	prior	to	vesting.	We	estimate	the	fair	value	of	OSUs	using	a	Monte	Carlo	simulation	model on	the	date	of	grant.	We	based	the	weighted	average	estimated	value	of	RSU	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:

|  | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Estimated\tvalues | $31.63 | $25.40 | $21.45 |
| Risk-free\tinterest\trate | 0.6% | 0.5% | 0.2% |
| Dividend\tyield | 2.9% | 3.3% | 3.8% |
| Volatility | 27% | 23% | 25% |

We	use	the	Black-Scholes	option	pricing	model	to	estimate	the	fair	value	of	options	granted	under	the	2006	Plan	and	rights	to	acquire	shares	of	common stock	granted	under	the	2006	Stock	Purchase	Plan.	No	options	were	granted	in	2015.	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 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Dec\t26,\n2015 |  | Dec\t27,\n2014 | Dec\t28,\n2013 | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t28,\n2013 |
| Estimated\tvalues |  | n/a | $3.61 | $3.11 | $6.56 | $5.87 | $4.52 |
| Expected\tlife\t(in\tyears) |  | n/a | 5.1 | 5.2 | 0.5 | 0.5 | 0.5 |
| Risk-free\tinterest\trate |  | n/a | 1.7% | 0.8% | 0.1% | 0.1% | 0.1% |
| Dividend\tyield |  | n/a | 3.6% | 3.9% | 3.1% | 3.2% | 4.0% |
| Volatility |  | n/a | 23% | 25% | 25% | 22% | 22% |

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.	We	use	historical	option	exercise	data	as	the	basis	for	determining	expected	life,	as	we	believe	that historical	data	provides	a	reasonable	basis	upon	which	to	estimate	the	expected	life	input	for	valuing	options	using	the	Black-Scholes	model.

# Restricted	Stock	Unit	Awards

Restricted	stock	unit	activity	for	each	period	was	as	follows:

|  | Number	of<br>RSUs<br>(In	Millions) | Average<br>Grant-Date<br>Fair	Value |
| :--- | :--- | :--- |
| 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 |
| Granted | 57.2 | $25.40 |
| Vested | (42.5) | $22.33 |
| Forfeited | (8.6) | $22.94 |
| December\t27,\t2014 | 119.4 | $23.89 |
| Granted | 42.4 | $31.63 |
| Vested | (46.6) | $23.61 |
| Forfeited | (7.8) | $25.76 |
| December\t26,\t2015 | 107.4 | $26.93 |
| Expected\tto\tvest\tas\tof\tDecember\t26,\t2015 | 102.5 | $26.93 |

The	aggregate	fair	value	of	awards	that	vested	in	 2015	was	$1.5	billion	($1.1	billion	in	2014	and	$1.0	billion	in	2013),	which	represents	the	market	value of	our	common	stock	on	the	date	that	the	RSUs	vested.	The	grant-date	fair	value	of	awards	that	vested	in	2015	was	$1.1	billion	($949	million	in	2014	and $899	million	in	2013).	The	number	of	RSUs	vested	includes	shares	of	common	stock	that	we	withheld	on	behalf	of	employees	to	satisfy	the	minimum statutory	tax	withholding	requirements.	RSUs	that	are	expected	to	vest	are	net	of	estimated	future	forfeitures.

As	of	December	26,	2015,	there	was	$1.8	billion	in	unrecognized	compensation	costs	related	to	RSUs	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	26,	2015,	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 | 43.8 | $21.07 |  | 1.8 | $609 |
| Expected\tto\tvest | 9.6 | $24.07 |  | 4.1 | $104 |
| Total | 53.4 | $21.61 |  | 2.2 | $713 |

Aggregate	intrinsic	value	represents	the	difference	between	the	exercise	price	and	 $34.98,	the	closing	price	of	our	common	stock	on	 December	24,	2015, 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	$42	million	completed	vesting	in	2015	($68	million	in	2014	and	$186	million	in	2013).	As	of	December	26,	2015,	there	was $13	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	approximately	eight	months.

Stock	option	activity	for	each	period	was	as	follows:

|  | Number	of<br>Options<br>(In	Millions) | Average<br>Exercise<br>Price |
| :--- | :--- | :--- |
| December\t29,\t2012 | 202.8 | $20.20 |
| Granted | 20.1 | $22.99 |
| Exercised | (65.0) | $18.76 |
| Cancelled\tand\tforfeited | (3.0) | $22.58 |
| Expired | (1.9) | $22.56 |
| December\t28,\t2013 | 153.0 | $21.10 |
| Granted | 0.6 | $25.34 |
| Exercised | (63.7) | $19.87 |
| Cancelled\tand\tforfeited | (2.7) | $23.70 |
| Expired | (9.9) | $27.00 |
| December\t27,\t2014 | 77.3 | $21.30 |
| Granted | — | $— |
| Exercised | (21.9) | $20.34 |
| Cancelled\tand\tforfeited | (1.1) | $23.23 |
| Expired | (0.1) | $20.87 |
| December\t26,\t2015 | 54.2 | $21.65 |
| Options\texercisable\tas\tof: |  |  |
| December\t28,\t2013 | 111.5 | $20.25 |
| December\t27,\t2014 | 54.7 | $20.29 |
| December\t26,\t2015 | 43.8 | $21.07 |

The	aggregate	intrinsic	value	of	stock	option	exercises	in	2015	was	$284	million	($611	million	in	2014	and	$265	million	in	2013),	which	represents	the difference	between	the	exercise	price	and	the	value	of	our	common	stock	at	the	time	of	exercise.	No	stock	options	were	granted	during	2015.

As	of	December	26,	2015,	outstanding	options	and	exercisable	options	information,	by	range	of	exercise	prices,	was	as	follows:

|  |  |  |  | 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 |
| $1.82 | - | $15.00 | 0.4 |  | 2.9 | $11.70 | 0.4 | $11.70 |
| $15.01 | - | $20.00 | 21.7 |  | 0.8 | $18.48 | 21.7 | $18.48 |
| $20.01 | - | $25.00 | 24.7 |  | 3.1 | $22.92 | 16.9 | $22.86 |
| $25.01 | - | $27.42 | 7.4 |  | 3.3 | $27.15 | 4.8 | $27.23 |
| Total |  |  | 54.2 |  | 2.2 | $21.65 | 43.8 | $21.07 |

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	26,	2015	ranged	from	$1.12	to	$27.42.

# Stock	Purchase	Plan

Approximately	77%	of	our	employees	were	participating	in	our	2006	Stock	Purchase	Plan	as	of	 December	26,	2015	(76%	in	2014	and	76%	in	2013). Employees	purchased	15.8	million	shares	of	common	stock	in	2015	for	$421	million	under	the	2006	Stock	Purchase	Plan	(19.4	million	shares	of	common stock	for	$393	million	in	2014	and	20.5	million	shares	of	common	stock	for	$369	million	in	2013).	As	of	December	26,	2015,	unrecognized	share-based compensation	costs	related	to	rights	to	acquire	shares	of	common	stock	under	our	stock	purchase	plan	totaled	$14	million.	We	expect	to	recognize	those costs	over	a	period	of	approximately	two	months.

# Note	19:	Common	Stock	Repurchases

# Common	Stock	Repurchase	Program

During	2015,	we	repurchased	95.7	million	shares	of	common	stock	at	a	cost	of	 $3.0	billion	(332.4	million	shares	of	common	stock	at	a	cost	of	 $10.8	billion in	2014	and	94.1	million	shares	of	common	stock	at	a	cost	of	 $2.1	billion	in	2013).	We	have	repurchased	4.8	billion	shares	of	common	stock	at	a	cost	of $104.9	billion	since	the	program	began	in	1990.

# Restricted	Stock	Unit	Withholdings

We	grant	RSUs	pursuant	to	the	2006	Plan.	 For	the	majority	of	RSUs	granted,	the	number	of	shares	of	common	stock	issued	on	the	date	the	RSUs	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	treat	shares	of	common	stock	withheld	for	tax	purposes	on	behalf	of	our	employees	in	connection	with	the	vesting	of RSUs	as	common	stock	repurchases	because	they	reduce	the	number	of	shares	that	would	have	been	issued	upon	vesting.	These	withheld	shares	of common	stock	are	not	considered	common	stock	repurchases	under	our	authorized	common	stock	repurchase	plan.	During	2015,	we	withheld	13.5 million	shares	of	common	stock	to	satisfy	 $442	million	(12.0	million	shares	of	common	stock	to	satisfy	 $332	million	in	2014	and	13.1	million	shares	of common	stock	to	satisfy	$293	million	in	2013)	of	employees'	tax	obligations.

# Note	20:	Gains	(Losses)	on	Equity	Investments,	Net

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

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Share\tof\tequity\tmethod\tinvestee\tlosses,\tnet | $(95) | $(69) | $(69) |
| Impairments | (185) | (146) | (123) |
| Gains\ton\tsales,\tnet | 145 | 422 | 515 |
| Dividends | 52 | 57 | 46 |
| Other,\tnet | 398 | 147 | 102 |
| Total\tgains\t(losses)\ton\tequity\tinvestments,\tnet | $315 | $411 | $471 |

The	substantial	majority	of	other,	net	for	2015	resulted	from	gains	on	third-party	merger	transactions,	and	the	majority	of	gains	on	sales,	net	for	2014 resulted	from	gains	on	private	equity	sales.

During	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	LLC,	which	had	been	accounted	for	as	an	equity	method	investment.	We	received	proceeds	of	$142	million	on	the	sale	of	our	shares in	Clearwire	Corporation	and	$328	million	on	the	sale	of	our	interest	in	Clearwire	LLC.	The	proceeds	received	on	the	sale	of	our	shares	in	Clearwire Corporation	and	our	interest	in	Clearwire	LLC	are	included	in	"sales	of	available-for-sale	investments"	and	"other	investing,"	respectively,	within	investing activities	on	the	consolidated	statements	of	cash	flows.	During	2013,	we	recognized	gains	of	$111	million	on	the	sale	of	our	shares	in	Clearwire Corporation	and	$328	million	on	the	sale	of	our	interest	in	Clearwire	LLC.	The	total	gain	of	 $439	million	on	these	transactions	is	included	in	"gains	(losses) on	equity	investments,	net"	on	the	consolidated	statements	of	income.

# Note	21:	Interest	and	Other,	Net

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

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Interest\tincome | $124 | $141 | $104 |
| Interest\texpense | (337) | (192) | (244) |
| Other,\tnet | 108 | 94 | (11) |
| Total\tinterest\tand\tother,\tnet | $(105) | $43 | $(151) |

During	2015,	we	recognized	an	interest	and	other,	net	loss	primarily	due	to	higher	interest	expense,	which	includes	the	 2015	issuances	of	our	$9.5	billion aggregate	principal	amount	of	senior	unsecured	notes.	For	further	information	on	these	transactions,	see	"Note	15:	Borrowings."	This	was	partially	offset by	divestiture	gains	recognized	in	2015.	For	further	information	on	these	transactions,	see	"Note	9:	Divestitures."

During	2014,	we	completed	the	divestiture	of	our	Intel	Media	assets.	As	a	result	of	the	transaction,	we	recognized	a	gain	within	"other,	net"	in	the preceding	table.	For	further	information,	see	"Note	9:	Divestitures."

# Note	22:	Earnings	Per	Share

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

| Years	Ended<br>(In	Millions,	Except	Per	Share	Amounts) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Net\tincome\tavailable\tto\tcommon\tstockholders | $11,420 | $11,704 | $9,620 |
| Weighted\taverage\tshares\tof\tcommon\tstock\toutstanding—basic | 4,742 | 4,901 | 4,970 |
| Dilutive\teffect\tof\temployee\tequity\tincentive\tplans | 64 | 75 | 68 |
| Dilutive\teffect\tof\tconvertible\tdebt | 88 | 80 | 59 |
| Weighted\taverage\tshares\tof\tcommon\tstock\toutstanding—diluted | 4,894 | 5,056 | 5,097 |
| Basic\tearnings\tper\tshare\tof\tcommon\tstock | $2.41 | $2.39 | $1.94 |
| Diluted\tearnings\tper\tshare\tof\tcommon\tstock | $2.33 | $2.31 | $1.89 |

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

Potentially	dilutive	shares	of	common	stock	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	RSUs,	and	the	assumed	issuance	of	common	stock	under	the	stock	purchase plan.	Potentially	dilutive	shares	of	common	stock	for	our	2005	debentures	are	determined	by	applying	the	if-converted	method.	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	shares	of	common	stock	are	determined	by	applying	the	treasury	stock	method.	For	further	discussion	on	the	specific conversion	features	of	our	2005	and	2009	debentures,	see	"Note	15:	Borrowings."

In	2015,	we	excluded	on	average	2	million	outstanding	stock	options	and	RSUs	from	the	computation	of	diluted	earnings	per	share	of	common	stock because	these	shares	of	common	stock	would	have	been	anti-dilutive	(10	million	in	2014	and	55	million	in	2013).	These	options	could	potentially	be included	in	the	diluted	earnings	per	share	of	common	stock	calculation	in	the	future	if	the	average	market	value	of	the	shares	of	common	stock	increases and	is	greater	than	the	exercise	price	of	these	options.

In	all	years	presented,	we	 included	our	2009	debentures	in	the	calculation	of	diluted	earnings	per	share	of	common	stock	because	the	average	market price	was	above	the	conversion	price.	We	could	potentially	exclude	the	2009	debentures	in	the	future	if	the	average	market	price	is	below	the	conversion price.

# Note	23:	Income	Taxes

# Income	Tax	Provision

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

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Income\tbefore\ttaxes: |  |  |  |
| U.S. | $8,800 | $11,565 | $9,374 |
| Non-U.S. | 5,412 | 4,236 | 3,237 |
| Total\tincome\tbefore\ttaxes | 14,212 | 15,801 | 12,611 |
| Provision\tfor\ttaxes: |  |  |  |
| Current: |  |  |  |
| Federal | 2,828 | 3,374 | 2,730 |
| State | 40 | 38 | 68 |
| Non-U.S. | 842 | 969 | 716 |
| Total\tcurrent\tprovision\tfor\ttaxes | 3,710 | 4,381 | 3,514 |
| Deferred: |  |  |  |
| Federal | (862) | (263) | (412) |
| Other | (56) | (21) | (111) |
| Total\tdeferred\tprovision\tfor\ttaxes | (918) | (284) | (523) |
| Total\tprovision\tfor\ttaxes | $2,792 | $4,097 | $2,991 |
| Effective\ttax\trate | 19.6% | 25.9% | 23.7% |

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:

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| 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 | (7.9) | (6.1) | (5.8) |
| Settlements,\teffective\tsettlements,\tand\trelated\tremeasurements | (2.9) | — | — |
| Domestic\tmanufacturing\tdeduction\tbenefit | (2.0) | (2.1) | (2.1) |
| Research\tand\tdevelopment\ttax\tcredits | (1.7) | (1.7) | (3.5) |
| Other | (0.9) | 0.8 | 0.1 |
| Effective\ttax\trate | 19.6\t% | 25.9\t% | 23.7\t% |

Most	of	the	decrease	in	our	effective	tax	rate	in	2015	compared	to	2014	was	driven	by	one-time	items,	a	higher	proportion	of	our	income	from	lower	taxed jurisdictions,	and	our	decision	to	indefinitely	reinvest	certain	prior	years'	non-U.S.	earnings	positively	impacted	our	effective	income	tax	rate.

A	substantial	majority	of	the	increase	in	our	effective	tax	rate	between	 2014	and	2013	was	driven	by	the	reenacted	U.S.	R&D	tax	credit	in	2013	containing two	years'	worth	of	R&D	tax	credits.	The	U.S.	R&D	tax	credit	was	reenacted	in	the	fourth	quarter	of	2014	retroactive	for	the	full	year.	It	was	also	reenacted in	the	first	quarter	of	2013	retroactive	to	the	beginning	of	2012.

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	2023;	however,	the	exemptions	in	certain	countries	are	eligible	for	renewal.

During	2015,	net	income	tax	benefits	attributable	to	equity-based	compensation	transactions	that	were	allocated	to	stockholders'	equity	totaled $172 million	(net	benefits	of	$103	million	in	2014	and	net	benefits	of	$3	million	in	2013).

# 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	26,<br>2015 | Dec	27,<br>2014 |
| :--- | :--- | :--- |
| Deferred\ttax\tassets: |  |  |
| Accrued\tcompensation\tand\tother\tbenefits | $931 | $982 |
| Share-based\tcompensation | 424 | 438 |
| Deferred\tincome | 694 | 691 |
| Inventory | 598 | 339 |
| State\tcredits\tand\tnet\toperating\tlosses | 613 | 519 |
| Other,\tnet | 760 | 715 |
| Gross\tdeferred\ttax\tassets | 4,020 | 3,684 |
| Valuation\tallowance | (701) | (595) |
| Total\tdeferred\ttax\tassets | 3,319 | 3,089 |
| Deferred\ttax\tliabilities: |  |  |
| Property,\tplant\tand\tequipment | (505) | (1,171) |
| Licenses\tand\tintangibles | (563) | (576) |
| Convertible\tdebt | (1,042) | (977) |
| Unrealized\tgains\ton\tinvestments\tand\tderivatives | (717) | (1,017) |
| Investment\tin\tnon-U.S.\tsubsidiaries | (37) | (252) |
| Other,\tnet | (358) | (291) |
| Total\tdeferred\ttax\tliabilities | (3,222) | (4,284) |
| Net\tdeferred\ttax\tassets\t(liabilities) | 97 | (1,195) |
| Reported\tas: |  |  |
| Current\tdeferred\ttax\tassets | 2,036 | 1,958 |
| Non-current\tdeferred\ttax\tassets | 600 | 622 |
| Non-current\tdeferred\ttax\tliabilities | (2,539) | (3,775) |
| Net\tdeferred\ttax\tassets\t(liabilities) | $97 | $(1,195) |

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	26,	2015	included	allowances	related	to	unrealized	state	credit	carryforwards	of	 $607	million	and	matters related	to	our	non-U.S.	subsidiaries	of	$94	million.

As	of	December	26,	2015,	our	federal,	state,	and	non-U.S.	net	operating	loss	carryforwards	for	income	tax	purposes	were	 $171	million,	$101	million,	and $384	million,	respectively.	A	majority	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	2035.	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	$218	million	that	is	not	likely	to	be	recovered	and	has	been	reduced	by	a	valuation	allowance.

As	of	December	26,	2015,	we	had	not	recognized	U.S.	deferred	income	taxes	on	a	cumulative	total	of	 $26.9	billion	of	undistributed	earnings	for	certain non-U.S.	subsidiaries	and	$1.8	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	$468	million	as	of	December	26,	2015	($79	million	as	of	December	27,	2014)	is	included	in	other	current	assets. Current	income	taxes	payable	of	$272	million	as	of	December	26,	2015	($443	million	as	of	December	27,	2014)	is	included	in	other	accrued	liabilities.

Long-term	income	taxes	payable	of	$114	million	as	of	December	26,	2015	($262	million	as	of	December	27,	2014)	is	included	in	other	long-term	liabilities, which	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:

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Beginning\tgross\tunrecognized\ttax\tbenefits | $577 | $207 | $189 |
| Settlements\tand\teffective\tsettlements\twith\ttax\tauthorities\tand\trelated\tremeasurements | (452) | (220) | (2) |
| Increases\tin\tbalances\trelated\tto\ttax\tpositions\ttaken\tduring\tprior\tperiods | 4 | 173 | 21 |
| Decreases\tin\tbalances\trelated\tto\ttax\tpositions\ttaken\tduring\tprior\tperiods | (34) | (1) | (9) |
| Increases\tin\tbalances\trelated\tto\ttax\tpositions\ttaken\tduring\tcurrent\tperiod | 6 | 418 | 8 |
| Ending\tgross\tunrecognized\ttax\tbenefits | $101 | $577 | $207 |

The	related	tax	benefit	for	settlements,	effective	settlements,	and	remeasurements	is	 $419	million	for	2015	(insignificant	in	2014	and	2013).

If	the	remaining	balance	of	$101	million	of	unrecognized	tax	benefits	as	of	 December	26,	2015	($577	million	as	of	December	27,	2014)	were	recognized	in a	future	period,	it	would	result	in	a	tax	benefit	of	$32	million	($485	million	as	of	December	27,	2014)	and	a	reduction	in	the	effective	tax	rate.

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	2015	($21	million	in	2014	and	insignificant	in	2013). As	of	December	26,	2015,	we	had	$34	million	of	accrued	interest	and	penalties	related	to	unrecognized	tax	benefits	( $44	million	as	of	December	27, 2014).

Our	tax	policy	is	to	comply	with	the	laws,	regulations,	and	filing	requirements	of	all	jurisdictions	in	which	we	conduct	business.	We	regularly	engage	in discussions	and	negotiations	with	tax	authorities	regarding	tax	matters	in	various	jurisdictions.	Although	the	timing	of	the	resolutions	and/or	closures	of audits	is	highly	uncertain,	it	is	reasonably	possible	that	certain	U.S.	federal	and	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	of	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	2002.	For	federal	tax	returns,	we	are	no	longer	subject	to	tax	examination	for	years	prior	to	 2009.

# Note	24:	Other	Comprehensive	Income	(Loss)

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

|  |  | December	26,	2015 |  |  | December	27,	2014 |  |  | December	28,	2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Years\tEnded\n(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 | $(999) | $350 | $(649) | $1,029 | $(359) | $670 | $1,963 | $(687) | $1,276 |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| (gains)\tlosses\ton |  |  |  |  |  |  |  |  |  |
| available-for-sale |  |  |  |  |  |  |  |  |  |
| investments\tincluded |  |  |  |  |  |  |  |  |  |
| in\tnet\tincome | (93) | 32 | (61) | (142) | 49 | (93) | (146) | 51 | (95) |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| (gains)\tlosses\ton |  |  |  |  |  |  |  |  |  |
| deferred\ttax\tasset |  |  |  |  |  |  |  |  |  |
| valuation\tallowance |  |  |  |  |  |  |  |  |  |
| included\tin\tnet |  |  |  |  |  |  |  |  |  |
| income | — | (18) | (18) | — | (41) | (41) | — | (26) | (26) |
| Change\tin\tunrealized |  |  |  |  |  |  |  |  |  |
| holding\tgains\t(losses) |  |  |  |  |  |  |  |  |  |
| on\tderivatives | (298) | 93 | (205) | (589) | 160 | (429) | (166) | 76 | (90) |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| (gains)\tlosses\ton |  |  |  |  |  |  |  |  |  |
| derivatives\tincluded |  |  |  |  |  |  |  |  |  |
| in\tnet\tincome | 522 | (160) | 362 | 13 | (11) | 2 | 30 | (29) | 1 |
| Change\tin\tnet\tprior\nservice\t(costs)\tcredits | (2) | 1 | (1) | (42) | 5 | (37) | 17 | (2) | 15 |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| amortization\tof\tnet |  |  |  |  |  |  |  |  |  |
| prior\tservice\tcosts |  |  |  |  |  |  |  |  |  |
| (credits) | 10 | (2) | 8 | 6 | (2) | 4 | 4 | (1) | 3 |
| Change\tin\tactuarial\ngains\t(losses) | 73 | 7 | 80 | (433) | 3 | (430) | 725 | (275) | 450 |
| Less:\tadjustment\tfor |  |  |  |  |  |  |  |  |  |
| amortization\tof |  |  |  |  |  |  |  |  |  |
| actuarial\t(gains) |  |  |  |  |  |  |  |  |  |
| losses | 67 | (19) | 48 | 37 | (9) | 28 | 101 | (31) | 70 |
| Change\tin\tnet\tforeign |  |  |  |  |  |  |  |  |  |
| currency\ttranslation |  |  |  |  |  |  |  |  |  |
| adjustment | (187) | 17 | (170) | (275) | 24 | (251) | 45 | (7) | 38 |
| Other\tcomprehensive\nincome\t(loss) | $(907) | $301 | $(606) | $(396) | $(181) | $(577) | $2,573 | $(931) | $1,642 |

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	change	in	actuarial	valuation	in	2014	in	the	preceding	table	includes	 $1.4	billion	in	actuarial	losses	arising	during	the	year	offset	by	a	 $1.0	billion reduction	in	losses	due	to	a	freeze	of	future	benefit	accruals	in	the	U.S.	Intel	Minimum	Pension	Plan.	For	further	information,	see	"Note	16:	Retirement Benefit	Plans."

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\t28,\t2013 | $1,882 | $67 | $4 | $(14) | $(602) | $(94) | $1,243 |
| Other\tcomprehensive\tincome\n(loss)\tbefore\treclassifications | 1,029 | — | (589) | (42) | (433) | (275) | (310) |
| Amounts\treclassified\tout\tof |  |  |  |  |  |  |  |
| accumulated\tother |  |  |  |  |  |  |  |
| comprehensive\tincome\t(loss) | (142) | — | 13 | 6 | 37 | — | (86) |
| Tax\teffects | (310) | (41) | 149 | 3 | (6) | 24 | (181) |
| Other\tcomprehensive\tincome\n(loss) | 577 | (41) | (427) | (33) | (402) | (251) | (577) |
| December\t27,\t2014 | 2,459 | 26 | (423) | (47) | (1,004) | (345) | 666 |
| Other\tcomprehensive\tincome\n(loss)\tbefore\treclassifications | (999) | — | (298) | (2) | 73 | (187) | (1,413) |
| Amounts\treclassified\tout\tof |  |  |  |  |  |  |  |
| accumulated\tother |  |  |  |  |  |  |  |
| comprehensive\tincome\t(loss) | (93) | — | 522 | 10 | 67 | — | 506 |
| Tax\teffects | 382 | (18) | (67) | (1) | (12) | 17 | 301 |
| Other\tcomprehensive\tincome\n(loss) | (710) | (18) | 157 | 7 | 128 | (170) | (606) |
| December\t26,\t2015 | $1,749 | $8 | $(266) | $(40) | $(876) | $(515) | $60 |

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

|  | Income	Before	Taxes	Impact	for	Years	Ended | (In	Millions) |  |  |
| :--- | :--- | :--- | :--- | :--- |
| Comprehensive\tIncome\tComponents | Dec\t26,\n2015 | Dec\t27,\n2014 | Dec\t28,\n2013 | Location |
| Unrealized\tholding\tgains\t(losses)\ton\tavailable-\nfor-sale\tinvestments: |  |  |  |  |
|  | $2 | $10 | $8 | Interest\tand\tother,\tnet |
|  |  |  |  | Gains\t(losses)\ton\tequity\tinvestments, |
|  | 91 | 132 | 138 | net |
|  | 93 | 142 | 146 |  |
| Unrealized\tholding\tgains\t(losses)\ton\tderivatives:\nCurrency\tforwards | (290) | (31) | (61) | \t Cost\tof\tSales |
|  | (177) | 18 | 30 | \t Research\tand\tdevelopment |
|  | (46) | 2 | — | \t Marketing,\tgeneral\tand\tadministrative |
| Other\tinstruments | — | (2) | 1 | \t Cost\tof\tSales |
|  | (9) | — | — | Interest\tand\tother,\tnet |
|  | (522) | (13) | (30) |  |
| Amortization\tof\tpension\tand\tpostretirement\nbenefit\tcomponents: |  |  |  |  |
| Prior\tservice\tcredits\t(costs) | (10) | (6) | (4) |  |
| Actuarial\tgains\t(losses) | (67) | (37) | (101) |  |
|  | (77) | (43) | (105) |  |
| Total\tamounts\treclassified\tout\tof |  |  |  |  |
| accumulated\tother\tcomprehensive\tincome |  |  |  |  |
| (loss) | $(506) | $86 | $11 |  |

The	amortization	of	pension	and	postretirement	benefit	components	are	included	in	the	computation	of	net	periodic	benefit	cost.	For	further	information, see	"Note	16:	Retirement	Benefit	Plans."	The	estimated	net	prior	service	costs	and	net	actuarial	losses	for	the	defined-benefit	plans	that	will	be	amortized from	accumulated	other	comprehensive	income	(loss)	into	net	periodic	benefit	cost	during	2016	are	$7	million	and	$42	million,	respectively.

We	estimate	that	we	will	reclassify	approximately	 $185	million	(before	taxes)	of	net	derivative losses	included	in	accumulated	other	comprehensive income	(loss)	into	earnings	within	the	next	12	months.

# Note	25:	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.	An	unfavorable	outcome	may	result	in	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.	Except	as	specifically	described	below,	we	have not	concluded	that	settlement	of	any	of	the	legal	proceedings	noted	in	this	section	is	appropriate	at	this	time.

# Government	Competition	Matters	and	Related	Consumer	Class	Actions

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	the	following	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.

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	€1.1	billion	($1.4	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.

The	EC	decision	contained	no	specific	direction	on	whether	or	how	we	should	modify	our	business	practices.	Instead,	the	decision	stated	that	we	should "cease	and	desist"	from	further	conduct	that,	in	the	EC's	opinion,	would	violate	applicable	law.	We	took	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.

We	appealed	the	EC	decision	to	the	Court	of	First	Instance	(which	has	been	renamed	the	General	Court)	in	July	2009.	The	hearing	of	our	appeal	took place	in	July	2012.	In	June	2014,	the	General	Court	rejected	our	appeal	in	its	entirety.	In	August	2014,	we	filed	an	appeal	with	the	European	Court	of Justice.	On	November	11,	2014,	Intervener	Association	for	Competitive	Technologies	filed	comments	in	support	of	Intel's	grounds	of	appeal.	The	EC	and interveners	filed	briefs	in	November	2014,	we	filed	a	reply	in	February	2015,	and	the	EC	filed	a	rejoinder	in	April	2015.	The	Court	of	Justice	is	likely	to	hold oral	argument	and	issue	its	decision	in	2016.

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	and	state	class	actions	other	than	the	California	class	actions	were	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	personal	computers	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	before	the	district	court	in	July	2013.	In	July	2014,	the	district	court	affirmed	the	Special Master's	ruling	and	issued	an	order	denying	the	MDL	plaintiffs'	motion	for	class	certification.	In	August	2014,	plaintiffs	filed	a	petition	for	interlocutory appeal	of	the	district	court's	decision	with	the	U.S.	Court	of	Appeals	for	the	Third	Circuit,	which	the	Third	Circuit	denied	in	October	2014.	In	December 2014,	Intel	filed	a	motion	for	summary	judgment	on	the	claims	of	the	remaining	individual	plaintiffs.	We	subsequently	negotiated	a	settlement	of	the	claims and	the	case	was	dismissed	in	September	2015.

All	California	class	actions	have	been	consolidated	in	the	Superior	Court	of	California	in	Santa	Clara	County.	The	plaintiffs	in	the	California	actions	moved for	class	certification,	which	we	are	in	the	process	of	opposing.	At	our	request,	the	court	in	the	California	actions	agreed	to	delay	ruling	on	this	motion	until after	the	Delaware	district	court	ruled	on	the	similar	motion	in	the	MDL	proceedings.	The	plaintiffs	asked	the	court	for	leave	to	retain	a	new	expert	and	to amend	their	previous	motion	for	class	certification.	The	court	granted	plaintiffs'	request	in	February	2015	and	the	hearing	on	plaintiffs'	amended	class certification	motion	took	place	in	January	2016;	we	are	awaiting	the	court's	decision.	Given	the	procedural	posture	and	the	nature	of	these	cases,	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	lawsuits	were	removed	to	the	United	States	District	Court	for	the	Northern	District	of	California	and	in	September	2011	the plaintiffs	filed	a	consolidated	amended	complaint,	captioned	In	re	High	Tech	Employee	Antitrust	Litigation .	The	plaintiffs'	allegations	reference	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	in	2005,	not	to	cold	call each	other's	employees.	Plaintiffs	assert	claims	under	Section	1	of	the	Sherman	Antitrust	Act	and	Section	4	of	the	Clayton	Antitrust	Act	and	seek	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	October	2013,	the	district	court	certified	a	class	consisting	of	approximately	 65,000	current	or	former	employees	of	the	seven	defendants	and	set	the matter	for	trial	in	late	May	2014.	The	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	the	court	denied	in	March	2014.

In	April	2014,	Intel,	Adobe,	Apple,	and	Google	reached	an	agreement	with	plaintiffs	to	settle	this	lawsuit,	but	in	August	2014,	the	district	court	denied preliminary	approval	of	the	settlement.	In	September	2014,	defendants	filed	a	petition	for	writ	of	mandamus	asking	the	U.S.	Court	of	Appeals	for	the	Ninth Circuit	to	reverse	the	district	court's	decision.	The	Ninth	Circuit	ordered	briefing	and	scheduled	a	March	2015	hearing	date	on	the	writ	petition.	Defendants have	withdrawn	the	petition	for	writ	of	mandamus	in	light	of	the	settlement	agreement	discussed	below.

In	January	2015,	Intel,	Adobe,	Apple,	and	Google	reached	a	second	agreement	with	plaintiffs	to	settle	this	lawsuit,	which	the	court	preliminarily	approved in	March	2015.	The	court	held	a	final	fairness	hearing	in	July	2015,	and	in	September	2015,	gave	its	final	approval	of	the	settlement	and	entered	final judgment	in	the	lawsuit.	We	made	our	settlement	payment	in	October	2015,	which	we	accrued	for	in	our	operating	expenses	for	2014.	Although	we disputed	the	plaintiffs'	claims,	we	agreed	to	settle	the	lawsuit	to	avoid	the	uncertainties,	expenses,	and	diversion	of	resources	from	continued	litigation.

# In	re	Intel	Corporation	Shareholder	Derivative	Litigation	regarding	High	Tech	Employee	Antitrust	Litigation

In	March	2014,	the	Police	Retirement	System	of	St.	Louis	(PRSSL)	filed	a	shareholder	derivative	action	in	the	Superior	Court	of	California	in	Santa	Clara County	against	Intel,	certain	current	and	former	members	of	our	Board	of	Directors	and	a	current	officer.	The	complaint	alleges	that	the	defendants breached	their	duties	to	the	company	by	participating	in,	or	allowing,	alleged	antitrust	violations,	which	were	alleged	in	In	re	High	Tech	Employee	Antitrust Litigation.	In	March	2014,	a	second	plaintiff,	Barbara	Templeton,	filed	a	substantially	similar	derivative	suit	in	the	same	court.	In	May	2014,	a	third shareholder,	Robert	Achermann,	filed	a	substantially	similar	derivative	action	in	the	same	court.	The	court	consolidated	the	three	actions	into	one,	which is	captioned	In	re	Intel	Corporation	Shareholder	Derivative	Litigation .	Plaintiffs	filed	a	consolidated	complaint	in	July	2014.	In	August	2015,	the	court granted	our	motion	to	dismiss	the	consolidated	complaint.	The	plaintiffs	thereafter	filed	a	motion	for	reconsideration	and	a	motion	for	new	trial,	both	of which	the	court	denied	in	October	2015.	In	November	2015,	plaintiffs	PRSSL	and	Templeton	appealed	the	court's	decision.

In	June	2015,	the	International	Brotherhood	of	Electrical	Workers	(IBEW)	filed	a	shareholder	derivative	action	in	the	Chancery	Court	in	Delaware	against Intel,	certain	current	and	former	members	of	our	Board	of	Directors,	and	a	current	officer.	The	lawsuit	makes	allegations	that	are	substantially	similar	to those	in	the	California	shareholder	derivative	litigation	described	above,	but	contain	additional	allegations	regarding	breach	of	the	duty	of	disclosure surrounding	the	In	re	High	Tech	Employee	Antitrust	Litigation 	and	that	the	Intel	2013	and	2014	proxy	statements	were	false	and	misleading	in	that	they misrepresented	the	effectiveness	of	the	Board's	oversight	of	compliance	issues	at	Intel	and	the	Board's	compliance	with	Intel's	Code	of	Conduct	and Board	of	Director	Guidelines	on	Significant	Corporate	Governance	Issues.	In	October	2015,	the	court	stayed	the	IBEW	lawsuit	for	six	months	pending further	developments	in	the	California	case.

# 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	setoff	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	at	LIBOR	plus	13.5%,	compounded	daily.	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	May	2014,	the	United	States	District	Court	for	the	Southern	District	of	New	York	denied	our	request	that	it	withdraw	its	reference	of plaintiffs'	adversary	complaint	to	the	bankruptcy	court.	In	January	2015,	Intel	and	the	plaintiffs	filed	competing	motions	for	summary	judgment.	Plaintiffs' motion	requested	judgment	against	Intel	"in	the	amount	of	no	less	than"	$129	million,	plus	interest.	In	September	2015,	the	bankruptcy	court	ruled	in	favor of	Intel	and	issued	proposed	findings	of	fact	and	conclusions	of	law	recommending	that	the	district	court	deny	plaintiffs'	motion	for	summary	judgment	and grant	Intel's	motion	for	summary	judgment.	In	October	2015,	plaintiffs	voluntarily	dismissed	the	lawsuit	with	prejudice.

# McAfee,	Inc.	Shareholder	Litigation

On	August	19,	2010,	we	announced	that	we	had	agreed	to	acquire	all	of	the	common	stock	of	McAfee,	Inc.	(McAfee)	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	appealed	the	final	judgment.	Intel,	McAfee,	and McAfee's	board	of	directors	filed	an	opposition	to	plaintiff's	appeal	in	December	2014.	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.

# Note	26:	Operating	Segments	and	Geographic	Information

Our	operating	segments	in	effect	as	of	 December	26,	2015	included:

•				Non-Volatile	Memory	Solutions	Group

•				Internet	of	Things	Group •				New	Devices	Group

•				Intel	Security	Group

•				Software	and	Services	Group

During	the	first	quarter	of	2015,	we	combined	the	PC	Client	Group	and	Mobile	and	Communications	Group	to	create	the	Client	Computing	Group	(CCG). This	change	in	our	organizational	structure	reflects	our	strategy	to	address	all	aspects	of	the	client	computing	market	segment	and	utilize	our	intellectual property	to	offer	compelling	customer	solutions	for	a	wide	range	of	end-user	devices.	All	prior-period	amounts	have	been	retrospectively	adjusted	to reflect	the	way	we	internally	manage	and	monitor	segment	performance	starting	in	fiscal	year	2015,	and	include	other	minor	reorganizations.	Additionally, in	the	fourth	quarter	of	2015	we	renamed	the	McAfee	operating	segment	as	the	Intel	Security	Group.

The	Chief	Operating	Decision	Maker	(CODM)	is	our	CEO.	The	CODM	allocates	resources	to	and	assesses	the	performance	of	each	operating	segment using	information	about	its	revenue	and	operating	income	(loss).

We	manage	our	business	activities	primarily	based	on	a	product	segmentation	basis.	CCG	and	the	Data	Center	Group	(DCG)	are	our	reportable operating	segments.	The	Internet	of	Things	Group	and	the	aggregated	"software	and	services	operating	segments,"	as	shown	in	the	preceding	operating segment	list,	do	not	meet	the	quantitative	thresholds	to	qualify	as	reportable	operating	segments;	however,	we	have	elected	to	disclose	the	results	of these	non-reportable	operating	segments.	Our	Non-Volatile	Memory	Solutions	Group	(NSG)	and	New	Devices	Group	operating	segments	do	not	meet the	quantitative	thresholds	to	qualify	as	reportable	segments	and	their	combined	results	are	included	within	the	"all	other"	category.

Revenue	for	our	reportable	and	aggregated	non-reportable	operating	segments	is	primarily	related	to	the	following	product	lines:

•Client	Computing	Group.	Includes	platforms	designed	for	notebooks	(including	Ultrabook	devices),	2	in	1	systems,	desktops	(including	all-in-ones	and high-end	enthusiast	PCs),	tablets,	phones,	wireless	and	wired	connectivity	products,	and	mobile	communication	components.

•Data	Center	Group.	Includes	platforms	designed	for	the	enterprise,	cloud,	communications	infrastructure,	and	technical	computing	segments.

•Internet	of	Things	Group.	Includes	platforms	designed	for	Internet	of	Things	market	segments,	including	retail,	transportation,	industrial,	and	buildings and	home	use,	along	with	a	broad	range	of	other	market	segments.

•Software	and	services	operating	segments.	Includes	software	products	designed	to	deliver	innovative	solutions	that	secure	computers,	mobile devices,	and	networks,	and	software	products	and	services	that	promote	Intel	architecture	as	the	platform	of	choice	for	software	development.

We	have	sales	and	marketing,	manufacturing,	engineering,	finance,	and	administration	groups.	Expenses	for	these	groups	are	generally	allocated	to	the operating	segments,	and	the	expenses	are	included	in	the	following	operating	results.

The	"all	other"	category	includes	revenue	and	expenses	such	as:

•results	of	operations	from	our	NSG	and	New	Devices	Group;

•amounts	included	within	restructuring	and	asset	impairment	charges;

•a	portion	of	employee	benefits,	compensation,	and	other	expenses	not	allocated	to	the	operating	segments;

•divested	businesses	for	which	discrete	operating	results	are	not	regularly	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:

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| Net\trevenue: |  |  |  |
| Client\tComputing\tGroup |  |  |  |
| Platform | $30,654 | $33,210 | $32,385 |
| Other | 1,565 | 1,662 | 2,260 |
|  | 32,219 | 34,872 | 34,645 |
| Data\tCenter\tGroup |  |  |  |
| Platform | 14,882 | 13,366 | 11,219 |
| Other | 1,095 | 1,021 | 944 |
|  | 15,977 | 14,387 | 12,163 |
| Internet\tof\tThings |  |  |  |
| Platform | 1,976 | 1,814 | 1,485 |
| Other | 322 | 328 | 316 |
|  | 2,298 | 2,142 | 1,801 |
| Software\tand\tservices\toperating\tsegments | 2,167 | 2,216 | 2,188 |
| All\tother | 2,694 | 2,253 | 1,911 |
| Total\tnet\trevenue | $55,355 | $55,870 | $52,708 |
| Operating\tincome\t(loss): |  |  |  |
| Client\tComputing\tGroup | $8,165 | $10,323 | $8,708 |
| Data\tCenter\tGroup | 7,844 | 7,390 | 5,456 |
| Internet\tof\tThings\tGroup | 515 | 583 | 532 |
| Software\tand\tservices\toperating\tsegments | 210 | 81 | 57 |
| All\tother | (2,732) | (3,030) | (2,462) |
| Total\toperating\tincome | $14,002 | $15,347 | $12,291 |

Hewlett-Packard	Company,	our	largest	customer	in	2014,	separated	into	HP	Inc.	and	Hewlett	Packard	Enterprise	Company	on	November	1,	2015.	These entities	collectively	accounted	for	18%	of	our	net	revenue	in	 2015	(18%	in	2014	and	17%	in	2013).	Dell	Inc.	accounted	for	15%	of	our	net	revenue	(16% in	2014	and	15%	in	2013),	and	Lenovo	Group	Limited	accounted	for	13%	of	our	net	revenue	(12%	in	2014	and	12%	in	2013).	A	majority	of	the	revenue from	these	customers	was	from	the	sale	of	platforms	and	other	components	by	the	CCG	and	DCG	operating	segments.

Net	revenue	by	country	as	presented	below	is	based	on	the	billing	location	of	the	customer.	Revenue	from	unaffiliated	customers	for	each	period	was	as follows:

| Years	Ended<br>(In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| China\t(including\tHong\tKong) | $11,679 | $11,197 | $9,890 |
| Singapore | 11,544 | 11,573 | 10,997 |
| United\tStates | 11,121 | 9,828 | 9,091 |
| Taiwan | 10,661 | 8,955 | 8,888 |
| Other\tcountries | 10,350 | 14,317 | 13,842 |
| Total\tnet\trevenue | $55,355 | $55,870 | $52,708 |

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

| (In	Millions) | Dec	26,<br>2015 | Dec	27,<br>2014 | Dec	28,<br>2013 |
| :--- | :--- | :--- | :--- |
| United\tStates | $22,611 | $24,020 | $23,624 |
| Ireland | 5,789 | 5,433 | 2,986 |
| Israel | 1,661 | 1,957 | 2,667 |
| Other\tcountries | 1,797 | 1,828 | 2,151 |
| Total\tproperty,\tplant\tand\tequipment,\tnet | $31,858 | $33,238 | $31,428 |

# FINANCIAL	INFORMATION	BY	QUARTER	(UNAUDITED)

| (In	Millions,	Except	Per	Share	Amounts) | December	26 | September	26 | June	27 | March	28 |
| :--- | :--- | :--- | :--- | :--- |
| Net\trevenue | $14,914 | $14,465 | $13,195 | $12,781 |
| Gross\tmargin | $9,590 | $9,111 | $8,248 | $7,730 |
| Net\tincome | $3,613 | $3,109 | $2,706 | $1,992 |
| Basic\tearnings\tper\tshare\tof\tcommon\tstock | $0.77 | $0.65 | $0.57 | $0.42 |
| Diluted\tearnings\tper\tshare\tof\tcommon\tstock | $0.74 | $0.64 | $0.55 | $0.41 |
| Dividends\tper\tshare\tof\tcommon\tstock: |  |  |  |  |
| Declared | $— | $0.4800 | $— | $0.4800 |
| Paid | $0.2400 | $0.2400 | $0.2400 | $0.2400 |
| Market\tprice\trange\tcommon\tstock1: |  |  |  |  |
| High | $35.30 | $30.56 | $34.46 | $37.18 |
| Low | $28.76 | $25.87 | $30.81 | $29.89 |

| (In	Millions,	Except	Per	Share	Amounts) | December	27 | September	27 | June	28 | March	29 |
| :--- | :--- | :--- | :--- | :--- |
| Net\trevenue | $14,721 | $14,554 | $13,831 | $12,764 |
| Gross\tmargin | $9,621 | $9,458 | $8,917 | $7,613 |
| Net\tincome | $3,661 | $3,317 | $2,796 | $1,930 |
| Basic\tearnings\tper\tshare\tof\tcommon\tstock | $0.77 | $0.68 | $0.56 | $0.39 |
| Diluted\tearnings\tper\tshare\tof\tcommon\tstock | $0.74 | $0.66 | $0.55 | $0.38 |
| Dividends\tper\tshare\tof\tcommon\tstock: |  |  |  |  |
| Declared | $— | $0.4500 | $— | $0.4500 |
| Paid | $0.2250 | $0.2250 | $0.2250 | $0.2250 |
| Market\tprice\trange\tcommon\tstock1: |  |  |  |  |
| High | $37.67 | $35.33 | $30.93 | $26.67 |
| Low | $30.85 | $30.79 | $25.81 | $23.52 |

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	26,	2015,	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	26,	2015,	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	(2013	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	within	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	and	procedures	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.

# OTHER	INFORMATION

# None.

# PART	III

# ITEM	10. DIRECTORS,	EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

The	information	in	our	2016	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	2016	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	the	Code	is	published	on	our	corporate	website	at	 www.intel.com/governance.	We	intend	to	disclose	future	amendments	to	certain provisions	of	the	Code,	or	waivers	of	such	provisions	granted	to	executive	officers	and	directors,	on	the	website	within	four	business	days	following	the date	of	such	amendment	or	waiver.

# ITEM	11. EXECUTIVE	COMPENSATION

The	information	appearing	in	our	2016	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.

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

The	information	appearing	in	our	2016	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	26,	2015,	regarding	equity	compensation	plans	approved	and	not	approved	by	stockholders	is	summarized	in	the	following table	(shares	of	common	stock	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 |  |  |  | 253.7 |
| 2006\tStock\tPurchase\tPlan |  |  |  | 181.3 |
| Equity\tincentive\tplans\tapproved\tby\tstockholders | 165.4 | 2 | $21.75 | 435.0 |
| Equity\tincentive\tplans\tnot\tapproved\tby\tstockholders | 0.9 | 4 | $15.98 | — |
| Total | 166.3 |  | $21.65 | 435.0 |

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

2 Includes	112.1	million	shares	of	common	stock	granted	under	the	2006	Equity	Incentive	Plan	that	are	issuable	upon	RSUs	vesting,	including	a maximum	of	9.4	million	shares	of	common	stock	that	could	be	issued	at	the	end	of	the	requisite	period	for	outstanding	OSUs.	The	remaining balance	consists	of	outstanding	stock	option	grants.

3	 Assumes	shares	will	be	issued	at	the	maximum	vesting	amount	for	outstanding	OSUs.	This	number	reflects	a	difference	from	the	number	of	RSUs reported	in	"Note	18:	Employee	Equity	Incentive	Plans"	to	the	financial	statements	in	Part	II,	Item	8	of	this	Form	10-K.	If	it	is	assumed	that	shares	of common	stock	will	be	issued	at	the	target	vesting	amount	for	outstanding	OSUs,	an	additional	4.7	million	shares	of	common	stock	would	be included	in	the	shares	of	common	stock	available	for	future	issuance	amount	for	a	total	of	258.4	million	shares.	All	available	shares	may	be	granted as	RSUs,	OSUs,	or	options.

4	 Shares	issuable	under	outstanding	options	which	were	originally	granted	under	plans	that	we	assumed	in	connection	with	acquisitions.

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

The	information	appearing	in	our	2016	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	2016	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.

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

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

Intel,	the	Intel	logo,	Intel	Atom,	Celeron,	Celeron	Inside,	Intel	Core,	Intel	Inside,	the	Intel	Inside	logo,	Itanium,	Pentium,	Pentium	Inside,	Quark,	Intel RealSense,	True	Key,	Thunderbolt,	Xeon,	Intel	Xeon	Phi,	3D	XPoint,	and	Ultrabook	are	trademarks	of	Intel	Corporation	in	the	U.S.	and/or	other	countries.

McAfee	is	a	trademark	of	McAfee,	Inc.	in	the	U.S.	and/or	other	countries.

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

| Years	Ended<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 |  |  |  |  |
| December\t26,\t2015 | $38 | $12 | $(10) | $40 |
| December\t27,\t2014 | $38 | $10 | $(10) | $38 |
| December\t28,\t2013 | $38 | $5 | $(5) | $38 |
| Valuation\tallowance\tfor\tdeferred\ttax\tassets |  |  |  |  |
| December\t26,\t2015 | $595 | $190 | $(84) | $701 |
| December\t27,\t2014 | $456 | $128 | $11 | $595 |
| December\t28,\t2013 | $389 | $88 | $(21) | $456 |

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\tIntel | 8-K | 000-06217 | 3.1 | 5/22/2006 |
|  | Corporation\tdated\tMay\t17,\t2006 |  |  |  |  |
| 3.2 | Intel\tCorporation\tBylaws,\tas\tamended\tand\trestated\ton\tJanuary\t21, | 8-K | 000-06217 | 3.2 | 1/26/2016 |
|  | 2016 |  |  |  |  |
| 4.2.1 | Indenture\tfor\tthe\tRegistrant's\t2.95%\tJunior\tSubordinated\tConvertible | 10-K | 000-06217 | 4.2 | 2/27/2006 |
|  | Debentures\tdue\t2035\tbetween\tIntel\tCorporation\tand\tWells\tFargo |  |  |  |  |
|  | Bank,\tNational\tAssociation\t(as\tsuccessor\tto\tCitibank\tN.A.),\tdated\tas |  |  |  |  |
|  | of\tDecember\t16,\t2005\t(the\t"Convertible\tNote\tIndenture") |  |  |  |  |
| 4.2.2 | Indenture\tdated\tas\tof\tMarch\t29,\t2006\tbetween\tIntel\tCorporation\tand | S-3ASR | 333-132865 | 4.4 | 3/30/2006 |
|  | Wells\tFargo\tBank,\tNational\tAssociation\t(as\tsuccessor\tto\tCitibank |  |  |  |  |
|  | N.A.)\t(the\t"Open-Ended\tIndenture") |  |  |  |  |
| 4.2.3 | First\tSupplemental\tIndenture\tto\tConvertible\tNote\tIndenture,\tdated\tas | 10-K | 000-06217 | 4.2.3 | 2/20/2008 |
|  | of\tJuly\t25,\t2007 |  |  |  |  |
| 4.2.4 | First\tSupplemental\tIndenture\tto\tOpen-Ended\tIndenture,\tdated\tas\tof | 10-K | 000-06217 | 4.2.4 | 2/20/2008 |
|  | December\t3,\t2007 |  |  |  |  |
| 4.2.5 | Indenture\tfor\tthe\tRegistrant's\t3.25%\tJunior\tSubordinated\tConvertible | 10-Q | 000-06217 | 4.1 | 11/2/2009 |
|  | Debentures\tdue\t2039\tbetween\tIntel\tCorporation\tand\tWells\tFargo |  |  |  |  |
|  | Bank,\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\tdue |  |  |  |  |
|  | 2011 |  |  |  |  |
| 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\tdue |  |  |  |  |
|  | 2042,\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 |  |  |  |  |
| 4.2.9 | Fifth\tSupplemental\tIndenture\tto\tOpen-Ended\tIndenture,\tdated\tas\tof | 8-K | 000-06217 | 4.1 | 7/29/2015 |
|  | July\t29,\t2015,\tbetween\tIntel\tCorporation\tand\tWells\tFargo\tBank, |  |  |  |  |
|  | National\tAssociation,\tas\tsuccessor\ttrustee |  |  |  |  |
| 4.2.10 | Sixth\tSupplemental\tIndenture\tto\tOpen-Ended\tIndenture,\tdated\tas\tof | 8-K | 000-06217 | 4.2 | 8/11/2015 |
|  | August\t11,\t2015,\tamong\tIntel\tCorporation,\tWells\tFargo\tBank, |  |  |  |  |
|  | National\tAssociation,\tas\tsuccessor\ttrustee,\tand\tElavon\tFinancial |  |  |  |  |
|  | Services\tLimited,\tUK\tBranch,\tas\tpaying\tagent |  |  |  |  |
| 4.2.11 | Seventh\tSupplemental\tIndenture\tto\tOpen-Ended\tIndenture,\tdated\tas | 8-K | 000-06217 | 4.1 | 12/14/2015 |
|  | of\tDecember\t14,\t2015,\tamong\tIntel\tCorporation,\tWells\tFargo\tBank, |  |  |  |  |
|  | National\tAssociation,\tas\tsuccessor\ttrustee,\tand\tElavon\tFinancial |  |  |  |  |
|  | Services\tLimited,\tUK\tBranch,\tas\tpaying\tagent |  |  |  |  |
| 4.2.12 | Guarantee\tdated\tDecember\t28,\t2015\tby\tIntel\tCorporation\tin\tfavor\tof | 8-K | 000-06217 | 99.2 | 12/28/2015 |

| Number | Exhibit	Description | Form | File	Number | Exhibit | Date |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 10.1** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | 8-K | 000-06217 | 10.1 | 5/22/2006 |
|  | restated,\teffective\tMay\t17,\t2006 |  |  |  |  |
| 10.1.1** | Form\tof\tNotice\tof\tGrant—Restricted\tStock\tUnits | 8-K | 000-06217 | 10.13 | 7/6/2006 |
| 10.1.2** | 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\t2006 |  |  |  |  |
|  | Equity\tIncentive\tPlan\t(standard\toption\tprogram) |  |  |  |  |
| 10.1.3** | 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,\t2006 |  |  |  |  |
|  | and\tbefore\tJanuary\t19,\t2008\tunder\tthe\tstandard\tprogram) |  |  |  |  |
| 10.1.4** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tTerms\tand\tConditions | 8-K | 000-06217 | 10.19 | 7/6/2006 |
|  | relating\tto\tNonqualified\tStock\tOptions\tgranted\ton\tand\tafter\tMay\t17, |  |  |  |  |
|  | 2006\tand\tbefore\tJanuary\t19,\t2008\tunder\tthe\t2006\tEquity\tIncentive |  |  |  |  |
|  | Plan\t(for\toptions\tgranted\tunder\tthe\tELTSOP\toption\tprogram) |  |  |  |  |
| 10.1.5** | Form\tof\tNotice\tof\tGrant—Nonqualified\tStock\tOptions | 8-K | 000-06217 | 10.24 | 7/6/2006 |
| 10.1.6** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | 8-K | 000-06217 | 10.1 | 5/16/2007 |
|  | restated,\teffective\tMay\t16,\t2007 |  |  |  |  |
| 10.1.7** | Form\tof\tTerms\tand\tConditions\tRelating\tto\tNonqualified\tOptions | 10-Q | 000-06217 | 10.3 | 4/30/2009 |
|  | Granted\tto\tPaul\tOtellini\tunder\tthe\t2006\tEquity\tIncentive\tPlan |  |  |  |  |
| 10.1.8** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | 8-K | 000-06217 | 10.1 | 5/22/2009 |
|  | restated,\teffective\tMay\t20,\t2009 |  |  |  |  |
| 10.1.9** | Intel\tCorporation\tNon-Employee\tDirector\tRestricted\tStock\tUnit | 10-Q | 000-06217 | 10.1 | 4/27/2015 |
|  | Agreement\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(for\tRSUs\tgranted |  |  |  |  |
|  | on\tor\tafter\tJanuary\t23,\t2015\tunder\tthe\tDirector\tRSU\tprogram |  |  |  |  |
| 10.1.10** | Intel\tCorporation\tNon-Employee\tDirector\tRestricted\tStock\tUnit | 10-Q | 000-06217 | 10.2 | 4/27/2015 |
|  | Agreement\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(for\tRSUs\tgranted |  |  |  |  |
|  | on\tor\tafter\tJanuary\t23,\t2015\tunder\tthe\tDirector\tOSU\tprogram) |  |  |  |  |
| 10.1.11** | Intel\tCorporation\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\t2006 | 10-Q | 000-06217 | 10.3 | 4/27/2015 |
|  | Equity\tIncentive\tPlan\t(for\tRSUs\tgranted\ton\tor\tafter\tJanuary\t23,\t2015 |  |  |  |  |
|  | under\tthe\tExecutive\tRSU\tprogram) |  |  |  |  |
| 10.1.12** | Intel\tCorporation\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\t2006 | 10-Q | 000-06217 | 10.4 | 4/27/2015 |
|  | Equity\tIncentive\tPlan\t(for\tRSUs\tgranted\ton\tor\tafter\tJanuary\t23,\t2015 |  |  |  |  |
|  | under\tthe\tExecutive\tOSU\tprogram) |  |  |  |  |
| 10.1.13** | 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\tgranted |  |  |  |  |
|  | after\tJanuary\t17,\t2008) |  |  |  |  |
| 10.1.14** | Form\tof\tNotice\tof\tGrant\t-\tRestricted\tStock\tUnits | 10-Q | 000-06217 | 10.3 | 8/3/2009 |
| 10.1.15** | 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\tunder |  |  |  |  |
|  | the\tstandard\tManagement\tCommittee\tMember-Restricted\tStock\tUnit |  |  |  |  |
|  | program) |  |  |  |  |
| 10.1.16** | 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 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 10.1.17** | 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\tafter |  |  |  |  |
|  | January\t20,\t2011\tand\tbefore\tJanuary\t24,\t2012\tunder\tthe\t2006 |  |  |  |  |
|  | Equity\tIncentive\tPlan\t(standard\tOSU\tprogram) |  |  |  |  |
| 10.1.18** | 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\tafter |  |  |  |  |
|  | January\t20,\t2011\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(standard |  |  |  |  |
|  | Management\tCommittee\tMember\t-Restricted\tStock\tUnit\tprogram) |  |  |  |  |
| 10.1.19** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | S-8 | 333-175123 | 99.1 | 6/24/2011 |
|  | restated,\teffective\tMay\t19,\t2011 |  |  |  |  |
| 10.1.20** | 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,\t2012 |  |  |  |  |
|  | with\tYear\t2\tto\tYear\t5\tVesting) |  |  |  |  |
| 10.1.21** | 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\tafter |  |  |  |  |
|  | January\t24,\t2012\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(with\tYear\t2 |  |  |  |  |
|  | to\t5\tVesting) |  |  |  |  |
| 10.1.22** | Amendment\tto\tAll\tGrant\tAgreements\tof\tRestricted\tStock\tUnits\tand | 10-Q | 000-06217 | 10.6 | 5/2/2008 |
|  | Stock\tOptions\tgranted\tunder\tthe\t2006\tEquity\tIncentive\tPlan |  |  |  |  |
|  | (elimination\tof\tleave\tof\tabsence\tprovisions\tand\tthe\taddition\tof\tthe |  |  |  |  |
|  | ability\tto\tchange\tthe\tgrant\tagreement\tas\tlaws\tchange) |  |  |  |  |
| 10.1.23** | Amendment\tto\tthe\tRestricted\tStock\tUnit\tAgreement\tunder\tthe\t2006 | 10-Q | 000-06217 | 10.1 | 4/29/2013 |
|  | Equity\tIncentive\tPlan\t(for\tRSUs\tgranted\ton\tor\tafter\tJanuary\t24,\t2012 |  |  |  |  |
|  | with\tYear\t2\tto\tYear\t5\tVesting)\tand\tthe\tStandard\tTerms\tand |  |  |  |  |
|  | Conditions\tRelating\tto\tRestricted\tStock\tUnits\tGranted\ton\tand\tafter |  |  |  |  |
|  | January\t24,\t2012\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(with\tYear\t2 |  |  |  |  |
|  | to\t5\tVesting) |  |  |  |  |
| 10.1.24** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | 10-Q | 000-06217 | 10.1 | 7/29/2013 |
|  | restated,\teffective\tMay\t16,\t2013 |  |  |  |  |
| 10.1.25** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan\tStandard\tTerms\tand | 10-Q | 000-06271 | 10.1 | 10/29/2014 |
|  | Conditions\tRelating\tto\tRestricted\tStock\tUnits\tGranted\ton\tand\tafter |  |  |  |  |
|  | January\t23,\t2014\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(standard |  |  |  |  |
|  | OSU\tprogram) |  |  |  |  |
| 10.1.26** | Intel\tCorporation\tNon-Employee\tDirector\tRestricted\tStock\tUnit | 10-Q | 000-06217 | 10.2 | 10/29/2014 |
|  | Agreement\tunder\tthe\t2006\tEquity\tIncentive\tPlan\t(for\tRSUs\tgranted |  |  |  |  |
|  | on\tor\tafter\tJuly\t1,\t2014\tunder\tthe\tOSU\tprogram) |  |  |  |  |
| 10.1.27** | Intel\tCorporation\t2006\tEquity\tIncentive\tPlan,\tas\tamended\tand | 10-Q | 000-06217 | 10.2 | 7/27/2015 |
|  | restated,\teffective\tMay\t21,\t2015 |  |  |  |  |
| 10.2** | Intel\tCorporation\t2007\tExecutive\tOfficer\tIncentive\tPlan,\teffective\tas | 8-K | 000-06217 | 10.2 | 5/16/2007 |
|  | of\tJanuary\t1,\t2007 |  |  |  |  |
| 10.2.1** | Amendment\tto\tthe\tIntel\tCorporation\t2007\tExecutive\tOfficer\tIncentive | 10-K | 000-06217 | 10.31 | 2/23/2012 |
|  | Plan,\teffective\tas\tof\tJanuary\t1,\t2012 |  |  |  |  |
| 10.2.2** | Intel\tCorporation\t2014\tAnnual\tPerformance\tBonus\tPlan\t(amended | 10-K | 000-06217 | 10.9.2 | 2/14/2014 |
|  | and\trestated,\teffective\tJanuary\t1,\t2014) |  |  |  |  |
| 10.3** | Intel\tCorporation\tDeferral\tPlan\tfor\tOutside\tDirectors,\teffective\tJuly\t1, | 10-K | 333-45395 | 10.6 | 3/26/1999 |
|  | 1998 |  |  |  |  |
| 10.4** | Form\tof\tIndemnification\tAgreement\twith\tDirectors\tand\tExecutive | 10-K | 000-06217 | 10.15 | 2/22/2005 |
|  | Officers |  |  |  |  |
| 10.5** | Intel\tCorporation\tSheltered\tEmployee\tRetirement\tPlan\tPlus,\tas | S-8 | 333-172024 | 99.1 | 2/2/2011 |

# 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.

/S/				ANDY	D.	BRYANT /S/				DAVID	S.	POTTRUCK Andy	D.	Bryant David	S.	Pottruck Chairman	of	the	Board	and	Director Director February	12,	2016 February	12,	2016



Question: what is the percent of the square foot in millions of owned facilities in the other countries to the of the total owned facilities
Calculation: percent_other_countries = 17.2
percent_total = 47.9
percent_other_countries_total = percent_other_countries / percent_total
answer = percent_other_countries_total * 100
Answer: 35.9%