INTEL CORP

Previous wording

•our business plans and strategy and anticipated benefits therefrom, including with respect to our IDM 2.0 strategy, Smart Capital strategy, partnership with Brookfield, internal foundry model, updated reporting structure, and AI strategy;

Current wording

▪our business plans and strategy and anticipated benefits therefrom, including with respect to our IDM 2.0 strategy, Smart Capital strategy, partnerships with Apollo and Brookfield, internal foundry model, updated reporting structure, and AI strategy;

Previous wording

Total revenue of $12.7 billion was up $1.0 billion or 9% from Q1 2023, as CCG revenue increased 31%, DCAI revenue increased 5%, and NEX revenue decreased 8%. CCG revenue increased primarily due to higher notebook and desktop volumes as customer inventory levels normalized compared to higher levels in Q1 2023. DCAI revenue increased due to higher server ASPs primarily due to a lower mix of hyperscale customer-related revenue and a higher mix of high core count products, partially offset by lower server volume due to lower demand in a competitive environment and a higher mix of high core count products. NEX revenue decreased primarily due to 5G customers tempering purchases to reduce existing inventories, partially offset by higher Edge and Network revenue. Altera, an Intel Company (previously Intel's Programmable Solutions Group) and Mobileye revenue decreased as customers tempered purchases to reduce existing inventories.

Current wording

Total revenue of $12.8 billion was down $116 million from Q2 2023, as CCG revenue increased 9%, DCAI revenue decreased 3%, and NEX revenue decreased 1%. CCG revenue increased primarily due to higher notebook and desktop volumes as customer inventory levels improved compared to higher levels in Q2 2023. DCAI revenue decreased due to lower server volume from lower demand in a competitive environment, partially offset by higher server ASPs primarily due to a lower mix of hyperscale customer-related revenue and a higher mix of high core count products. NEX revenue was roughly flat. External Intel Foundry revenue decreased due to lower traditional packaging services and equipment sales. Altera® revenue decreased as customers tempered purchases to reduce existing inventories.

Previous wording

Our internal foundry model is a key component of our strategy and is designed to reshape our operational dynamics and drive greater transparency, accountability, and focus on costs and efficiency. We also previously announced our intent to operate Altera, an Intel Company (previously Intel's Programmable Solutions Group), as a standalone business, with segment reporting beginning in the first quarter of 2024. Altera was previously included in our DCAI segment results. As a result of these changes, we modified our segment reporting in the first quarter of 2024 to align to this new operating model. All prior period segment data has been retrospectively adjusted to reflect the way our Chief Operating Decision Maker (CODM) internally receives information and manages and monitors our operating segment performance starting in fiscal year 2024. There are no changes to our consolidated financial statements for any prior periods.

Current wording

Our internal foundry model is a key component of our strategy and is designed to reshape our operational dynamics and drive greater transparency, accountability, and focus on costs and efficiency. We also previously announced our intent to operate Altera as a standalone business, with segment reporting beginning in the first quarter of 2024. Altera was previously included in our DCAI segment results. As a result of these changes, we modified our segment reporting in the first quarter of 2024 to align to this new operating model. All prior period segment data has been retrospectively adjusted to reflect the way our Chief Operating Decision Maker (CODM) internally receives information and manages and monitors our operating segment performance starting in fiscal year 2024. There are no changes to our consolidated financial statements for any prior periods.

Previous wording

▪Segment expenses: consists of intersegment charges for product manufacturing and related services from Intel Foundry, external foundry and other manufacturing, product development costs, allocated expenses as described below, and direct operating expenses.

Current wording

▪Segment expenses: consists of intersegment charges for product manufacturing and related services from Intel Foundry, external foundry and other manufacturing expenses, product development costs, allocated expenses as described below, and direct operating expenses.

Previous wording

▪Segment revenue: consists substantially of intersegment product and services revenue for wafer fabrication and related products and services sold to Intel Products, Altera, and certain other Intel internal businesses. We recognize intersegment revenue when we satisfy performance obligations as evidenced by the transfer of control of Intel Foundry products and services to the Intel Products businesses, which is generally at the completion of wafer sorting and at the completion of assembly and test services. Intersegment sales are recorded at prices that are intended to approximate market pricing. Intel Foundry also includes certain third party foundry and assembly and test revenues from external customers that were $27 million in first three months of 2024 and $118 million in the first three months of 2023.

Current wording

▪Segment revenue: consists substantially of intersegment product and services revenue for wafer fabrication and related products and services sold to Intel Products, Altera, and certain other Intel internal businesses. We recognize intersegment revenue when we satisfy performance obligations as evidenced by the transfer of control of Intel Foundry products and services to the Intel Products businesses, which is generally at the completion of wafer sorting and at the completion of assembly and test services. Intersegment sales are recorded at prices that are intended to approximate market pricing. Intel Foundry also includes certain third party foundry and assembly and test revenues from external customers that were $77 million in the three months ended June 29, 2024 and $104 million in the first six months of 2024, compared to $231 million in the three months ended July 1, 2023 and $349 million in the first six months of 2023.

Previous wording

▪Segment expenses: Altera expenses consist of intersegment charges for product manufacturing and related services from Intel Foundry, third party manufacturing, allocated expenses as described below, and direct operating expenses. Mobileye expenses consists of third party direct expenses for product manufacturing and related services for the manufacturing of Mobileye products and direct operating expenses.

Current wording

▪Segment expenses: Altera expenses consist of intersegment charges for product manufacturing and related services from Intel Foundry, third party manufacturing expenses, allocated expenses as described below, and direct operating expenses. Mobileye expenses consists of third party direct expenses for product manufacturing and related services for the manufacturing of Mobileye products and direct operating expenses.

Previous wording

We allocate operating expenses from our sales and marketing group to the Intel Products operating segments, and allocate operating expenses from our finance and administration groups to all of our operating segments, except Mobileye. Previously, operating expense from all of these groups as well as manufacturing and engineering, were generally allocated to all the operating segments, except Mobileye.

Current wording

We allocate operating expenses from our sales and marketing group to the Intel Products operating segments, and allocate operating expenses from our finance and administration groups to all of our operating segments, except Mobileye.

Previous wording

We estimate that the substantial majority of our consolidated depreciation expense was incurred by Intel Foundry in the first three months of 2024 and in the first three months of 2023. Intel Foundry depreciation expense is substantially included in overhead cost pools and then combined with other costs, and subsequently absorbed into inventory as each product passes through the manufacturing process and is sold to Intel Products and other customers. As a result, it is impractical to determine the total depreciation expense included as a component of each Intel Products operating segment's operating income (loss) results.

Current wording

We estimate that the substantial majority of our consolidated depreciation expense in the first six months of 2024 and in the first six months of 2023 was incurred by Intel Foundry. Intel Foundry depreciation expense is substantially included in overhead cost pools and then combined with other costs, and subsequently absorbed into inventory as each product passes through the manufacturing process and is sold to Intel Products and other customers. As a result, it is impractical to determine the total depreciation expense included as a component of each Intel Products operating segment's operating income (loss).

Previous wording

Reporting units and goodwill reallocation: As a result of modifying our segment reporting in the first quarter of 2024, we reallocated goodwill among our affected reporting units on a relative fair value basis. We performed a quantitative goodwill impairment assessment for each of our reporting units immediately before and after our business reorganization. We concluded based on our pre-reorganization impairment test that goodwill was not impaired. As a result of our post-reorganization impairment test, we recognized a non-cash goodwill impairment loss of $222 million in the first three months of 2024 related to our new Intel Foundry reporting unit as the estimated fair value of the new reporting unit was lower than the assigned carrying value, which now includes substantially all of our allocated property, plant, and equipment. The Intel Foundry reporting unit has no remaining goodwill. The fair value substantially exceeded the carrying value for all remaining reporting units tested as part of our post-reorganization impairment test.

Current wording

Reporting units and goodwill reallocation: As a result of modifying our segment reporting in the first quarter of 2024, we reallocated goodwill among our affected reporting units on a relative fair value basis. We performed a quantitative goodwill impairment assessment for each of our reporting units immediately before and after our business reorganization. We concluded based on our pre-reorganization impairment test that goodwill was not impaired. As a result of our post-reorganization impairment test, we recognized a non-cash goodwill impairment loss of $222 million in the first quarter of 2024 related to our Intel Foundry reporting unit as the estimated fair value of the new reporting unit was lower than the assigned carrying value, which now includes substantially all of our allocated property, plant, and equipment. The Intel Foundry reporting unit has no remaining goodwill. The fair value substantially exceeded the carrying value for all remaining reporting units tested as part of our post-reorganization impairment test.

Previous wording

In 2022, we closed a transaction with Brookfield Asset Management (Brookfield) resulting in the formation of Arizona Fab LLC (Arizona Fab). We consolidate the results of Arizona Fab, a VIE, into our consolidated financial statements because we are the primary beneficiary. Generally, contributions will be made to, and distributions will be received from Arizona Fab based on both parties' proportional ownership. We will be the sole operator and main beneficiary of two new chip factories that will be constructed by Arizona Fab, and we will have the right to purchase 100% of the related factory output. Once production commences, we will be required to operate Arizona Fab at minimum production levels measured in wafer starts per week and will be required to limit excess inventory held on site or we will be subject to certain penalties.

Current wording

Arizona SCIP: We consolidate the results of an Arizona limited liability company (Arizona SCIP), a VIE, into our consolidated financial statements because we are the primary beneficiary. Generally, contributions will be made to, and distributions will be received from Arizona SCIP based on both parties' proportional ownership. We will be the sole operator and main beneficiary of two new chip factories that will be constructed by Arizona SCIP, and we will have the right to purchase 100% of the related factory output. Once production commences, we will be required to operate Arizona SCIP at minimum production levels measured in wafer starts per week and will be required to limit excess inventory held on site or we will be subject to certain penalties.

Previous wording

We have an unrecognized commitment to fund our respective share of the total construction costs of Arizona Fab of $29.0 billion.

Current wording

We have an unrecognized commitment to fund our respective share of the total construction costs of Arizona SCIP of $29.0 billion.

Previous wording

As of March 30, 2024, substantially all of the assets of Arizona Fab consisted of property, plant, and equipment. The assets held by Arizona Fab, which can be used only to settle obligations of the VIE and are not available to us, were$5.6 billion as of March 30, 2024 ($4.8 billion as of December 30, 2023).

Current wording

As of June 29, 2024, substantially all of the assets of Arizona SCIP consisted of property, plant, and equipment. The remaining assets and liabilities of Arizona SCIP were eliminated in our consolidated financial statements. The assets held by Arizona SCIP, which can be used only to settle obligations of the VIE and are not available to us, were$6.4 billion as of June 29, 2024 ($4.8 billion as of December 30, 2023).

Previous wording

Due to our net losses in the three months ended March 30, 2024 and April 1, 2023, 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 had an anti-dilutive effect on diluted loss per share for the period and were excluded from the computation of diluted loss per share.

Current wording

Due to our net losses in the three and six months ended June 29, 2024 and the six months ended July 1, 2023, 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 had an anti-dilutive effect on diluted loss per share for these periods and were excluded from the computation of diluted loss per share. Securities that were anti-dilutive were insignificant in all periods presented.

Previous wording

We sell certain of our accounts receivable on a non-recourse basis to third-party financial institutions. We record these transactions as sales of receivables and present cash proceeds ascash provided by operating activities in the Consolidated Condensed Statements of Cash Flows. Accounts receivable sold under non-recourse factoring arrangements were $500 million during the first three months of 2024 ($500 million in the first three months of 2023). After the sale of our accounts receivable, we expect to collect payment from the customers and remit it to the third-party financial institution.

Current wording

We sell certain of our accounts receivable on a non-recourse basis to third-party financial institutions. We record these transactions as sales of receivables and present cash proceeds ascash provided by operating activities in the Consolidated Condensed Statements of Cash Flows. Accounts receivable sold under non-recourse factoring arrangements were $1.0 billion during the first six months of 2024 ($1.0 billion in the first six months of 2023). After the sale of our accounts receivable, we expect to collect payment from the customers and remit it to the third-party financial institution.

Previous wording

Other accrued liabilities include deferred compensation of $2.9 billion as of March 30, 2024 ($2.9 billion as of December 30, 2023).

Current wording

Other accrued liabilities include deferred compensation of $3.0 billion as of June 29, 2024 ($2.9 billion as of December 30, 2023).

Previous wording

Interest expense is net of $363 million of interest capitalized in the first three months of 2024 ($363 million in the first three months of 2023).

Current wording

Interest expense is net of $374 million of interest capitalized in the second quarter of 2024 and $737 million in the first six months of 2024 ($381 million in the second quarter of 2023 and $744 million in the first six months of 2023).

Previous wording

Employee severance and benefit arrangements includes a charge of $129 million in the first quarter of 2024 relating to actions taken to streamline operations and to reduce costs. We expect these actions to besubstantially completed by the third quarter of 2024, but this is subject to change. Any changes to the estimates or timing will be reflected in our results of operations.

Current wording

Employee severance and benefit arrangements includes charges of $165 million in the three months ended June 29, 2024 and $294 million in the six months ended June 29, 2024 relating to actions taken to streamline operations and to reduce costs. We expect these actions to be substantially completed by the fourth quarter of 2024, but this is subject to change. Any changes to the estimates or timing will be reflected in our results of operations.

Previous wording

Asset impairment charges includes a goodwill impairment loss of $222 million in the first quarter of 2024 related to our new Intel Foundry reporting unit. Refer to "Note 2: Operating Segments" within Notes to Consolidated Condensed Financial Statements for further information on our business reorganization and goodwill impairment.

Current wording

Asset impairment charges includes a goodwill impairment loss of $222 million in the first quarter of 2024 related to our Intel Foundry reporting unit. Refer to "Note 2: Operating Segments" within Notes to Consolidated Condensed Financial Statements for further information on our business reorganization and goodwill impairment.

Previous wording

Our provision for, or benefit from, income taxes for an interim period has historically been determined using an estimated annual effective tax rate, adjusted for discrete items, if any. Under certain circumstances where we are unable to make a reliable estimate of the annual effective tax rate, we use the actual effective tax rate for the year-to-date period. During the first quarter of 2024, we usedthe actual effective tax rate approach due to the variability of the rate as a result of fluctuations in forecasted income and the effects of being taxed in multiple tax jurisdictions.

Current wording

In the second quarter of 2024 and YTD 2024, our benefit from income taxes was determined using the actual effective tax rate, adjusted for discrete items. We also utilized the actual effective tax rate method for the YTD 2023 period, and had a catch up adjustment to benefit from taxes during thesecond quarter of 2023 to conform to this methodology. We use the actual effective tax rate for the year-to-date period, adjusted for discrete items, if any, under certain circumstances where we are unable to make a reliable estimate of the annual effective tax rate. We used this approach in all periods presented due to the variability of the rate as a result of fluctuations in forecasted income and the effects of being taxed in multiple tax jurisdictions.

Previous wording

For certain of our marketable debt investments, we economically hedge market risks at inception with a related derivative instrument or the marketable debt investment itself is used to economically hedge currency exchange rate risk from remeasurement. These hedged investments are reported at fair value with gains or losses from the investments and the related derivative instruments recorded ininterest and other, net. The fair value of our hedged investments was $13.8 billion as of March 30, 2024 ($17.1 billion as of December 30, 2023). For hedged investments still held at the reporting date, we recorded net losses of $307 million in the first three months of 2024 ($90 million of net gains in the first three months of 2023). We recorded net gains on the related derivatives of $345 million in the first three months of 2024 ($102 million of net losses in the first three months of 2023).

Current wording

For certain of our marketable debt investments, we economically hedge market risks at inception with a related derivative instrument or the marketable debt investment itself is used to economically hedge currency exchange rate risk from remeasurement. These hedged investments are reported at fair value with gains or losses from the investments and the related derivative instruments recorded ininterest and other, net. The fair value of our hedged investments was $17.6 billion as of June 29, 2024 ($17.1 billion as of December 30, 2023). For hedged investments still held at the reporting date, we recorded net losses of $139 million in the second quarter of 2024 and net losses of $366 million in the first six months of 2024 ($183 million of net losses in the second quarter of 2023 and $91 million of net losses in the first six months of 2023). We recorded net gains on the related derivatives of $132 million in the second quarter of 2024 and net gains of $390 million in the first six months of 2024 ($237 million of net gains in the second quarter of 2023 and net gains of $124 million in the first six months of 2023).

Previous wording

Our remaining unhedged marketable debt investments are reported at fair value, with unrealized gains or losses, net of tax, recorded inaccumulated other comprehensive income (loss) and realized gains or losses recorded ininterest and other, net. The adjusted cost of our unhedged investments was $4.0 billion as of March 30, 2024 ($4.7 billion as of December 30, 2023), which approximated the fair value for these periods.

Current wording

Our remaining unhedged marketable debt investments are reported at fair value, with unrealized gains or losses, net of tax, recorded inaccumulated other comprehensive income (loss) and realized gains or losses recorded ininterest and other, net. The adjusted cost of our unhedged investments was $7.7 billion as of June 29, 2024 ($4.7 billion as of December 30, 2023), which approximated the fair value for these periods.

Previous wording

1 Approximately 90% of our marketable equity securities are subject to trading-volume or market-based restrictions, which limit the number of shares we may sell in a specified period of time, impacting our ability to liquidate these investments. Certain of the trading volume restrictions generally apply for as long as we own more than 1% of the outstanding shares. Market-based restrictions result from the rules of the respective exchange.

Current wording

1 Substantially all of our marketable equity securities are subject to trading-volume or market-based restrictions, which limit the number of shares we may sell in a specified period of time, impacting our ability to liquidate these investments. Certain of the trading volume restrictions generally apply for as long as we own more than 1% of the outstanding shares. Market-based restrictions result from the rules of the respective exchange.

Previous wording

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

Current wording

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

Previous wording

The NAND memory business included our NAND memory technology and manufacturing business (the NAND OpCo Business), which we deconsolidated upon closing the first phase of our sale agreement with SK hynix Inc (SK hynix) on December 29, 2021. We have a receivable within other current assetsfor the remaining proceeds of $2.0 billion, which remains outstanding as of March 30, 2024 and will be received upon the second closing of the transaction, expected to be in March 2025.

Current wording

We sold our NAND memory technology and manufacturing business (the NAND OpCo Business) to SK hynix Inc. (SK hynix) which we deconsolidated upon closing the first phase of the transaction on December 29, 2021. We have a receivable within other current assetsfor the transaction's remaining proceeds of $2.0 billion, which remains outstanding as of June 29, 2024 and will be received upon the second closing of the transaction, expected to be in March 2025.

Previous wording

The wafer manufacturing and sale agreement includes incentives and penalties that are contingent on the cost of operation and output of the NAND OpCo Business. These incentives and penalties present a maximum exposure of up to $500 million annually, and $1.5 billion in the aggregate. We are currently in negotiations with SK hynix to update the operating plan of the NAND OpCo Business, which may impact the metrics associated with the incentives and penalties and our expectations of the performance of the NAND OpCo Business against those metrics.

Current wording

In connection with the transaction, we have a wafer manufacturing and sale agreement that includes incentives and penalties that are contingent on the cost of operation and output of the NAND OpCo Business. These incentives and penalties present a maximum exposure of up to $500 million annually, and $1.5 billion in the aggregate. We are currently in negotiations with SK hynix to update the operating plan of the NAND OpCo Business, which may impact the metrics associated with the incentives and penalties and our expectations of the performance of the NAND OpCo Business against those metrics.

Previous wording

We were reimbursed for costs that we incurred on behalf of the NAND OpCo Business for corporate function services, which include human resources, information technology, finance, supply chain, and other compliance requirements. We recorded a receivable related to these reimbursable costs due from the NAND OpCo Business, a deconsolidated entity, of $150 million within other current assetsas of March 30, 2024 ($145 million recorded as of December 30, 2023).

Current wording

We were reimbursed for costs that we incurred on behalf of the NAND OpCo Business for corporate function services, which include human resources, information technology, finance, supply chain, and other compliance requirements. We recorded a receivable related to these reimbursable costs due from the NAND OpCo Business, a deconsolidated entity, of $144 million within other current assetsas of June 29, 2024 ($145 million recorded as of December 30, 2023).

Previous wording

Our senior fixed rate notes pay interest semiannually. We may redeem the fixed rate notes prior to their maturity at our option at specified redemption prices and subject to certain restrictions. The obligations under our senior fixed rate notes rank equally in the right of payment with all of our other existing and future senior unsecured indebtedness and effectively rank junior to all liabilities of our subsidiaries.

Current wording

In the first quarter of 2024, we issued a total of $2.6 billion aggregate principal amount of senior notes comprised of $500 million in 5.00% senior notes due 2031, $900 million in 5.15% senior notes due 2034 and $1.2 billion in 5.60% senior notes due 2054. All of our senior fixed rate notes pay interest semiannually. We may redeem the fixed rate notes prior to their maturity at our option at specified redemption prices and subject to certain restrictions. The obligations under our senior fixed rate notes rank equally in the right of payment with all of our other existing and future senior unsecured indebtedness and effectively rank junior to all liabilities of our subsidiaries.

Previous wording

In the first quarter of 2024, we issued a total of $2.6 billion aggregate principal amount of senior notes. We also expanded both our 5-year $5.0 billion revolving credit facility agreement and our 364-day $5.0 billion credit facility agreement, to $7.0 billion and $8.0 billion, respectively, and the maturity dates were extended by one year to February 2029 and January 2025, respectively. The revolving credit facilities hadno borrowings outstanding as of March 30, 2024.

Current wording

In the first quarter of 2024, we expanded both our 5-year $5.0 billion revolving credit facility agreement and our 364-day $5.0 billion credit facility agreement, to $7.0 billion and $8.0 billion, respectively, and the maturity dates were extended by one year to February 2029 and January 2025, respectively. These credit facilities are unsecured general obligations. The revolving credit facilities hadno borrowings outstanding as of June 29, 2024.

Previous wording

We have an ongoing authorization from our Board of Directors to borrow up to $10.0 billion under our commercial paper program. Wehad $793 million of commercial paper outstanding as of March 30, 2024 (no commercial paper outstanding as of December 30, 2023).

Current wording

We have an ongoing authorization from our Board of Directors to borrow up to $10.0 billion under our commercial paper program. In thesecond quarter of 2024, we settled in cash $2.6 billion of our commercial paper and had $3.2 billion of 5.48% -5.55% commercial paper outstanding as of June 29, 2024, which mature in July 2024 (no commercial paper outstanding as of December 30, 2023). Borrowings under the commercial paper program are unsecured general obligations.

Previous wording

2 Level 2 investments consist primarily of non-US government debt.

Current wording

2 Level 1 investments consist of US Treasury securities. Level 2 investments consist primarily of non-US government debt.

Previous wording

Financial instruments not recorded at fair value on a recurring basis include non-marketable equity securities and equity method investments that have not been remeasured or impaired in the current period, grants receivable, certain other receivables, and issued debt. We classify the fair value of grants receivable as Level 2. The estimated fair value of these financial instruments approximates their carrying value. The aggregate carrying value of grants receivable as of March 30, 2024 was $666 million (the aggregate carrying value as of December 30, 2023 was $559 million).

Current wording

Financial instruments not recorded at fair value on a recurring basis include non-marketable equity securities and equity method investments that have not been remeasured or impaired in the current period, grants receivable, certain other receivables, and issued debt. We classify the fair value of grants receivable as Level 2. The estimated fair value of these financial instruments approximates their carrying value. The aggregate carrying value of grants receivable as of June 29, 2024 was $546 million (the aggregate carrying value as of December 30, 2023 was $559 million).

Previous wording

We classify the fair value of issued debt (excluding any commercial paper) as Level 2. The fair value of our issued debt was $48.7 billion as of March 30, 2024 ($47.6 billion as of December 30, 2023).

Current wording

We classify the fair value of issued debt (excluding any commercial paper) as Level 2. The fair value of our issued debt was $45.9 billion as of June 29, 2024 ($47.6 billion as of December 30, 2023).

Previous wording

The before-tax net gains or losses attributed to cash flow hedges recognized inother comprehensive income (loss) were $431 million netloss in the first three months of 2024 ($53 million netgains in the first three months of 2023). Substantially all of our cash flow hedges were foreign currency contracts for all periods presented.

Current wording

The before-tax net gains or losses attributed to cash flow hedges recognized inother comprehensive income (loss) were $227 million net losses in the second quarter of 2024 and $658 million netlosses in the first six months of 2024 ($245 million net losses in the second quarter of 2023 and $191 million netlosses in the first six months of 2023). Substantially all of our cash flow hedges were foreign currency contracts for all periods presented.

Previous wording

During the first three months of 2024 and 2023, the amounts excluded from effectiveness testing were insignificant.

Current wording

During the first six months of 2024 and 2023, the amounts excluded from effectiveness testing were insignificant.

Previous wording

We are regularly party to various ongoing claims, litigation, and other proceedings, including those noted in this section. We have accrued a charge of $1.0 billion related to litigation involving VLSI and a charge of $401 million related to an EC-imposed fine, both as described below. Excluding the VLSI claims, 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; however, legal proceedings and related government investigations are subject to inherent uncertainties, and unfavorable rulings, excessive verdicts, or other events could occur. Unfavorable resolutions could include substantial monetary damages, fines, or penalties. Certain of these outstanding matters include speculative, substantial, or indeterminate monetary awards. 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. Unless specifically described below, we have not concluded that settlement of any of the legal proceedings noted in this section is appropriate at this time.

Current wording

We are regularly party to various ongoing claims, litigation, and other proceedings, including those noted in this section. We have accrued a charge of $1.0 billion related to litigation involving VLSI (see VLSI Technology LLC v. Intel below), a charge of $780 million related to three separate confidential agreements with R2, Third Point, and TRGP we anticipate entering into (see R2 Semiconductor Patent Litigation below), and a charge of $401 million related to an EC-imposed fine (see European Commission Competition Matter below). Excluding the VLSI claims and the R2 matter, 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; however, legal proceedings and related government investigations are subject to inherent uncertainties, and unfavorable rulings, excessive verdicts, or other events could occur. Unfavorable resolutions could include substantial monetary damages, fines, or penalties. Certain of these outstanding matters include speculative, substantial, or indeterminate monetary awards. 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. Unless specifically described below, we have not concluded that settlement of any of the legal proceedings noted in this section is appropriate at this time.

Previous wording

In April 2022 the EC appealed the General Court’s decision to the Court of Justice. In addition, in September 2023 the EC imposed a €376 million ($401 million) fine against us based on its finding that we made payments to prevent sales of specific rival products. We have appealed the EC’s decision. We have accrued a charge for the fine and are unable to make a reasonable estimate of the potential loss or range of losses in excess of this amount given the procedural posture and the nature of these proceedings.

Current wording

In April 2022 the EC appealed the General Court’s decision to the Court of Justice, which has indicated it will deliver its judgment in October 2024. In addition, in September 2023 the EC imposed a €376 million ($401 million) fine against us based on its finding that we made payments to prevent sales of specific rival products. We have appealed the EC’s decision. We have accrued a charge for the fine and are unable to make a reasonable estimate of the potential loss or range of losses in excess of this amount given the procedural posture and the nature of these proceedings.

Previous wording

As of April 24, 2024, consumer class action lawsuits against us were pending in the US and Canada. The plaintiffs, who purport to represent various classes of purchasers of our products, generally claim to have been harmed by our actions and/or omissions in connection with Spectre, Meltdown, and other variants of this class of security vulnerabilities that have been identified since 2018, and assert a variety of common law and statutory claims seeking monetary damages and equitable relief. In the US, class action suits filed in various jurisdictions between 2018 and 2021 were consolidated for all pretrial proceedings in the US District Court for the District of Oregon, which entered final judgment in favor of Intel in July 2022 based on plaintiffs’ failure to plead a viable claim. The Ninth Circuit Court of Appeals affirmed the district court’s judgment in November 2023, ending the litigation. In November 2023, new plaintiffs filed a consumer class action complaint in the US District Court for the Northern District of California with respect to a further vulnerability variant disclosed in August 2023 and commonly referred to as “Downfall.” We moved to dismiss that complaint in January 2024. In Canada, an initial status conference has not yet been scheduled in one case relating to Spectre and Meltdown pending in the Superior Court of Justice of Ontario, and a stay of a second case pending in the Superior Court of Justice of Quebec is in effect. In a class action relating to Spectre and Meltdown previously pending in Argentina, plaintiffs’ appeal of a May 2023 order dismissing their complaint for lack of standing was denied in February 2024, ending the lawsuit. Additional lawsuits and claims may be asserted seeking monetary damages or other related relief. Given the procedural posture and the nature of these cases, including that the pending proceedings are in the early stages, that alleged damages have not been specified, that uncertainty exists as to the likelihood of a class or classes being certified or the ultimate size of any class or classes if certified, and that there are significant factual and legal issues to be resolved, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from these matters.

Current wording

As of July 31, 2024, consumer class action lawsuits against us were pending in the US and Canada. The plaintiffs, who purport to represent various classes of purchasers of our products, generally claim to have been harmed by our actions and/or omissions in connection with Spectre, Meltdown, and other variants of this class of security vulnerabilities that have been identified since 2018, and assert a variety of common law and statutory claims seeking monetary damages and equitable relief. In the US, class action suits filed in various jurisdictions between 2018 and 2021 were consolidated for all pretrial proceedings in the US District Court for the District of Oregon, which entered final judgment in favor of Intel in July 2022 based on plaintiffs’ failure to plead a viable claim. The Ninth Circuit Court of Appeals affirmed the district court’s judgment in November 2023, ending the litigation. In November 2023, new plaintiffs filed a consumer class action complaint in the US District Court for the Northern District of California with respect to a further vulnerability variant disclosed in August 2023 and commonly referred to as “Downfall.” We moved to dismiss that complaint in January 2024. In Canada, an initial status conference has not yet been scheduled in one case relating to Spectre and Meltdown pending in the Superior Court of Justice of Ontario, and a stay of a second case pending in the Superior Court of Justice of Quebec is in effect. Additional lawsuits and claims may be asserted seeking monetary damages or other related relief. Given the procedural posture and the nature of these cases, including that the pending proceedings are in the early stages, that alleged damages have not been specified, that uncertainty exists as to the likelihood of a class or classes being certified or the ultimate size of any class or classes if certified, and that there are significant factual and legal issues to be resolved, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from these matters.

Previous wording

Multiple securities class action lawsuits were filed in the US District Court for the Northern District of California against us and certain officers following our July 2020 announcement of 7nm product delays. The court consolidated the lawsuits and appointed lead plaintiffs in October 2020, and in January 2021 plaintiffs filed a consolidated complaint. Plaintiffs purport to represent all persons who purchased or otherwise acquired our common stock from October 25, 2019 through October 23, 2020, and they generally allege that defendants violated the federal securities laws by making false or misleading statements about the timeline for 7nm products. In March 2023, the district court granted the defendants’ motion to dismiss the consolidated complaint, and in April 2023 entered judgment. Plaintiffs appealed, and on April 19, 2024 the Ninth Circuit affirmed the judgment; the Ninth Circuit’s ruling is subject to appeal. Given the procedural posture and the nature of the case, including that it is in the early stages, that alleged damages have not been specified, that uncertainty exists as to the likelihood of a class being certified or the ultimate size of any class if certified, and that there are significant factual and legal issues to be resolved, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from the matter. In July 2021, we introduced a new process node naming structure, and the 7nm process is now called Intel 4.

Current wording

Multiple securities class action lawsuits were filed in the US District Court for the Northern District of California against us and certain officers following our July 2020 announcement of 7nm product delays. The court consolidated the lawsuits and appointed lead plaintiffs in October 2020, and in January 2021 plaintiffs filed a consolidated complaint. Plaintiffs purported to represent all persons who purchased or otherwise acquired our common stock from October 25, 2019 through October 23, 2020, and they generally alleged that defendants violated the federal securities laws by making false or misleading statements about the timeline for 7nm products. The district court granted the defendants’ motion to dismiss the consolidated complaint and entered judgment in April 2023. The Ninth Circuit affirmed the district court’s judgment in April 2024, and plaintiffs did not appeal the Ninth Circuit’s ruling.

Previous wording

In October 2017, VLSI Technology LLC (VLSI) filed a complaint against us in the US District Court for the Northern District of California alleging that various Intel FPGA and processor products infringe eight patents VLSI acquired from NXP Semiconductors, N.V. (NXP). Intel prevailed on all eight patents and the court entered final judgment in April 2024. Further appeals are possible. In April 2019, VLSI filed three infringement suits against us in the US District Court for the Western District of Texas accusing various of our processors of infringement of eight additional patents it had acquired from NXP:

Current wording

In October 2017, VLSI Technology LLC (VLSI) filed a complaint against us in the US District Court for the Northern District of California alleging that various Intel FPGA and processor products infringe eight patents VLSI acquired from NXP Semiconductors, N.V. (NXP). VLSI sought damages, attorneys’ fees, costs and interest. Intel prevailed on all eight patents and the court entered final judgment in April 2024. In April 2019, VLSI filed three infringement suits against us in the US District Court for the Western District of Texas accusing various of our processors of infringement of eight additional patents it had acquired from NXP:

Previous wording

▪The first Texas case went to trial in February 2021, and the jury awarded VLSI $1.5 billion for literal infringement of one patent and $675 million for infringement of another patent under the doctrine of equivalents. In April 2022, the court entered final judgment, awarding VLSI $2.1 billion in damages and approximately $162.3 million in pre-judgment and post-judgment interest. We appealed the judgment to the Federal Circuit Court of Appeals, including the court’s rejection of Intel’s claim to have a license from Fortress Investment Group’s acquisition of Finjan. The Federal Circuit Court heard oral argument in October 2023. In December 2023, the Federal Circuit reversed the finding of infringement as to the patent for which VLSI was awarded $675 million. The Federal Circuit affirmed the finding of infringement as to the patent for which VLSI had been awarded $1.5 billion, but vacated the damages award and sent the case back to the trial court for further damages proceedings on that patent. The Federal Circuit also ruled that Intel can advance the defense that it is licensed to VLSI’s patents. In December 2021 and January 2022 the Patent Trial and Appeal Board (PTAB) instituted Inter Partes Reviews (IPR) on the claims found to have been infringed in the first Texas case, and in May and June 2023 found all of those claims unpatentable; VLSI has appealed the PTAB’s decision. In March 2024, Intel filed a motion to stay the case pending appeals of the IPRs. In April 2024, Intel moved to add the defense that it is licensed to VLSI’s patents.

Current wording

▪The first Texas case went to trial in February 2021, and the jury awarded VLSI $1.5 billion for literal infringement of one patent and $675 million for infringement of another patent under the doctrine of equivalents. In April 2022, the court entered final judgment, awarding VLSI $2.2 billion in damages and approximately $162 million in pre-judgment and post-judgment interest. We appealed the judgment to the Federal Circuit Court of Appeals, including the court’s rejection of Intel’s claim to have a license from Fortress Investment Group’s acquisition of Finjan. The Federal Circuit Court heard oral argument in October 2023. In December 2023, the Federal Circuit reversed the finding of infringement as to the patent for which VLSI was awarded $675 million. The Federal Circuit affirmed the finding of infringement as to the patent for which VLSI had been awarded $1.5 billion, but vacated the damages award and sent the case back to the trial court for further damages proceedings on that patent. The Federal Circuit also ruled that Intel can advance the defense that it is licensed to VLSI’s patents. In December 2021 and January 2022 the Patent Trial and Appeal Board (PTAB) instituted Inter Partes Reviews (IPR) on the claims found to have been infringed in the first Texas case, and in May and June 2023 found all of those claims unpatentable; VLSI has appealed the PTAB’s decision. In March 2024, Intel filed a motion to stay the case pending appeals of the IPRs. In April 2024, Intel moved to add the defense that it is licensed to VLSI’s patents.