Intel (INTC) 10-Q 3 Aug 09 2009 Q2 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Millions	6 Months Ended Jun. 27, 2009	Jul. 24, 2009	Jun. 27, 2008
Document and Company Information [Abstract]
Entity Registrant Name	Intel Corporation
Entity Central Index Key	0000050863
Document Type	10-Q
Document Period End Date	2009-06-27
Amendment Flag	false
Amendment Description	N/A
Company Fiscal Year End Date	--12-26
Entity Well Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$120,900
Entity Common Stock Shares Outstanding		5,598

Consolidated Condensed Statemen

Consolidated Condensed Statements of Operations (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 27, 2009	3 Months Ended Jun. 28, 2008	6 Months Ended Jun. 27, 2009	6 Months Ended Jun. 28, 2008
Net revenue	$8,024	$9,470	$15,169	$19,143
Cost of sales	3,945	4,221	7,852	8,687
Gross margin	4,079	5,249	7,317	10,456
Research and development	1,303	1,468	2,620	2,935
Marketing, general and administrative	2,697	1,430	3,897	2,779
Restructuring and asset impairment charges	91	96	165	425
Operating expenses	4,091	2,994	6,682	6,139
Operating income (loss)	(12)	2,255	635	4,317
Gains (losses) on equity method investments, net	(44)	(43)	(116)	(95)
Gains (losses) on other equity investments, net	(25)	(66)	(66)	(73)
Interest and other, net	31	167	126	335
Income (loss) before taxes	(50)	2,313	579	4,484
Provision for taxes	348	712	348	1,440
Net income (loss)	($398)	$1,601	$231	$3,044
Basic earnings (loss) per common share (in dollars per share)	-0.07	0.28	0.04	0.53
Diluted earnings (loss) per common share (in dollars per share)	-0.07	0.28	0.04	0.52
Cash dividends declared per common share (in dollars per share)	$0	$0	0.28	0.268
Weighted average common shares outstanding:
Basic (shares)	5,595	5,699	5,584	5,743
Diluted (shares)	5,595	5,800	5,656	5,840

Consolidated Condensed Balance

Consolidated Condensed Balance Sheets (USD $)
In Millions	Jun. 27, 2009	Dec. 27, 2008
Current assets:
Cash and cash equivalents	$3,826	$3,350	[1]
Short-term investments	5,195	5,331	[1]
Trading assets	2,603	3,162	[1]
Accounts receivable, net	1,938	1,712	[1]
Inventories	2,805	3,744	[1]
Deferred tax assets	1,217	1,390	[1]
Other current assets	883	1,182	[1]
Total current assets	18,467	19,871	[1]
Property, plant and equipment, net of accumulated depreciation of $30,956 ($30,544 as of December 27, 2008)	17,515	17,574	[1]
Marketable equity securities	513	352	[1]
Other long-term investments	3,002	2,924	[1]
Goodwill	3,932	3,932	[1]
Other long-term assets	5,632	5,819	[1]
Total assets	49,061	50,472	[1]
Current liabilities:
Short-term debt	24	102	[1]
Accounts payable	1,726	2,390	[1]
Accrued compensation and benefits	1,412	2,015	[1]
Accrued advertising	718	807	[1]
Deferred income on shipments to distributors	480	463	[1]
Other accrued liabilities	2,719	2,041	[1]
Total current liabilities	7,079	7,818	[1]
Long-term income taxes payable	556	736	[1]
Long-term debt	1,174	1,185	[1]
Other long-term liabilities	1,205	1,187	[1]
Stockholders' equity:
Preferred stock	0	0	[1]
Common stock and capital in excess of par value, 5,597 shares issued and outstanding (5,562 as of December 27, 2008)	13,995	13,402	[1]
Accumulated other comprehensive income (loss)	(153)	(393)	[1]
Retained earnings	25,205	26,537	[1]
Total stockholders' equity	39,047	39,546	[1]
Total liabilities and stockholders' equity	$49,061	$50,472	[1]
[1]As adjusted due to the implementation of FSP APB 14-1. See "Note 2: Accounting Changes."

1_Consolidated Condensed Balanc

Consolidated Condensed Balance Sheets (Parenthetical) (USD $)
In Millions	Jun. 27, 2009	Dec. 27, 2008
Balance Sheets (Parenthetical) [Abstract]
Accumulated depreciation	$30,956	$30,544	[1]
Common stock, shares issued	5,597	5,562	[1]
Common stock, shares outstanding	5,597	5,562	[1]
[1]As adjusted due to the implementation of FSP APB 14-1. See "Note 2: Accounting Changes."

2_Consolidated Condensed Statem

Consolidated Condensed Statements of Cash Flows (USD $)
In Millions	6 Months Ended Jun. 27, 2009		6 Months Ended Jun. 28, 2008
Cash and cash equivalents, beginning of period	$3,350	[1]	$7,307
Cash flows provided by (used for) operating activities:
Net income	231		3,044
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	2,419		2,144
Share-based compensation	471		462
Restructuring, asset impairment, and net loss on retirement of assets	212		460
Excess tax benefit from share-based payment arrangements	0		(28)
Amortization of intangibles	137		126
(Gains) losses on equity method investments, net	116		95
(Gains) losses on other equity investments, net	66		73
(Gains) on divestitures	0		(39)
Deferred taxes	116		(325)
Changes in assets and liabilities:
Trading assets	(20)		49
Accounts receivable	(226)		140
Inventories	927		71
Accounts payable	(664)		18
Accrued compensation and benefits	(695)		(785)
Income taxes payable and receivable	(39)		(553)
Other assets and liabilities	711		91
Total adjustments	3,531		1,999
Net cash provided by operating activities	3,762		5,043
Cash flows provided by (used for) investing activities:
Additions to property, plant and equipment	(2,490)		(2,058)
Purchases of available-for-sale investments	(2,953)		(3,849)
Maturities and sales of available-for-sale investments	3,063		4,719
Purchases of trading assets	(881)		(1,326)
Maturities and sales of trading assets	1,545		288
Loans receivable	(243)		0
Investments in non-marketable equity investments	(124)		(444)
Return of equity method investments	239		91
Proceeds from divestitures	0		75
Other investing activities	28		(40)
Net cash used for investing activities	(1,816)		(2,544)
Cash flows provided by (used for) financing activities:
Increase (decrease) in short-term debt, net	(76)		33
Excess tax benefit from share-based payment arrangements	0		28
Proceeds from sales of shares through employee equity incentive plans	248		828
Repurchase and retirement of common stock	(79)		(5,077)
Payment of dividends to stockholders	(1,563)		(1,539)
Net cash used for financing activities	(1,470)		(5,727)
Net increase (decrease) in cash and cash equivalents	476		(3,228)
Cash and cash equivalents, end of period	3,826		4,079
Cash paid during the period for:
Interest, net of capitalized interest	3		3
Income taxes, net of refunds	$278		$2,293
[1]As adjusted due to the implementation of FSP APB 14-1. See "Note 2: Accounting Changes."

Basis of Presentation

Basis of Presentation
	6 Months Ended Jun. 27, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation	Note 1: Basis of Presentation We prepared our interim consolidated condensed financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December27, 2008, except for the adoption of Financial Accounting Standards Board (FASB)Staff Position (FSP)Accounting Principles Board (APB)14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1). Prior year balances have been retrospectively adjusted. See Note 2: Accounting Changes and Note 17: Borrowings for further discussion. We have made estimates and judgments affecting the amounts reported in our consolidated condensed financial statements and the accompanying notes. Our actual results may differ materially from these estimates. 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 of investments in debt instruments and the determination of other-than-temporary impairments; the assessment of recoverability of long-lived assets; the recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax positions); and the valuation of inventory. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the consolidated financial statements in our Annual Report on Form 10-K for the year ended December27, 2008. We have evaluated subsequent events, as defined by Statement of Financial Accounting Standards (SFAS)No.165, Subsequent Events, through the date that the financial statements were issued on August3, 2009.

Accounting Changes

Accounting Changes
	6 Months Ended Jun. 27, 2009 USD / shares
Accounting Changes [Abstract]
Accounting Changes	Note 2: Accounting Changes In the first quarter of 2009, we adopted the provisions of FSP APB 14-1, which changed the accounting for convertible debt instruments with cash settlement features. As of adoption, FSP APB 14-1 applied to our junior subordinated convertible debentures issued in 2005 (the 2005 debentures). In accordance with FSP APB 14-1, we recognized both the liability and equity components of the 2005 debentures at fair value. The liability component is recognized as the fair value of a similar instrument that does not have a conversion feature at issuance. The equity component, which is the value of the conversion feature at issuance, is recognized as the difference between the proceeds from the issuance of the 2005 debentures and the fair value of the liability component, after adjusting for the deferred tax impact. The 2005 debentures were issued at a coupon rate of 2.95%, which was below that of a similar instrument that does not have a conversion feature (6.45%). Therefore, the valuation of the debt component, using the income approach, resulted in a debt discount. The debt discount is reduced over the expected life of the debt, which is also the stated life of the debt. FSP APB 14-1 will also be applicable for the issuance of our convertible debt issued subsequent to the second quarter of 2009. See Note 17: Borrowings for further discussion. As a result of applying FSP APB 14-1 retrospectively to all periods presented, we recognized the following incremental effects on individual line items on the consolidated condensed balance sheets: December 27, 2008 Before After FSP APB FSP APB (In millions) 14-1 Adjustments 14-1 Property, plant and equipment, net $ 17,544 $ 30 $ 17,574 Other long-term assets1 $ 6,092 $ (273 ) $ 5,819 Long-term debt $ 1,886 $ (701 ) $ 1,185 Common stock and capital in excess of par value $ 12,944 $ 458 $ 13,402 1 Primarily relates to the adjustment made to the net deferred tax asset. FSP APB 14-1 did not result in a change to our prior-period consolidated condensed statements of operations, as the interest associated with our debt issuances is capitalized and added to the cost of qualified assets. The adoption of FSP APB 14-1 did not result in a significant change to depreciation expense or earnings per common share for the second quarter or the first half of 2009. In the first quarter of 2009, we adopted Statement of Financial Accounting Standards No.141 (revised 2007), Business Combinations (SFAS No.141(R)) as amended by FASB staff position FSP 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies. SFAS No.141(R) generally requires an entity to recognize the assets acquired, liabilities assumed, contingencies, and contingent consideration at their fair value on the acquisition date. In circumstances where the acquisition-date fair value for a contingency cannot be determined during the measurement period and it is concluded that it is probable that an asset

Recent Accounting Pronouncement

Recent Accounting Pronouncements
	6 Months Ended Jun. 27, 2009 USD / shares
Recent Accounting Pronouncements [Abstract]
Recent Accounting Pronouncements	Note 3: Recent Accounting Pronouncements In December2008, the FASB issued FSP 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets (FSP 132(R)-1). FSP 132(R)-1 requires additional disclosures for plan assets of defined benefit pension or other postretirement plans. The required disclosures include a description of our investment policies and strategies, the fair value of each major category of plan assets, the inputs and valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using significant unobservable inputs on changes in plan assets, and the significant concentrations of risk within plan assets. FSP 132 (R)-1 does not change the accounting treatment for postretirement benefits plans. FSP 132(R)-1 is effective for us for fiscal year 2009. In June2009, the FASB issued SFAS No.166, Accounting for Transfers of Financial Assets an amendment of FASB Statement No.140 (SFAS No.166). SFAS No.166 eliminates the concept of a qualifying special-purpose entity; removes the scope exception from applying FASB Interpretation No.46(R), Consolidation of Variable Interest Entities (FIN 46(R)) to qualifying special-purpose entities; changes the requirements for derecognizing financial assets; and requires enhanced disclosure. SFAS No.166 is effective for us beginning in the first quarter of fiscal year 2010. SFAS No.166 is not expected to have a significant impact on our consolidated financial statements. In June2009, the FASB issued SFAS No.167, Amendments to FASB Interpretation No.46(R) (SFAS No 167). SFAS No.167 eliminates a required quantitative approach to determine whether a variable interest gives the entity a controlling financial interest in a variable interest entity in favor of a qualitatively focused analysis. It requires an ongoing reassessment of whether an entity is the primary beneficiary. It also nullifies FSP FAS 140-4 and FIN 46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities (FSP FAS 140-4 and FIN 46(R)-8). However, the content of the disclosures required by SFAS No.167 is generally consistent with FSP FAS 140-4 and FIN 46(R)-8, which we adopted beginning with our 2008 consolidated financial statements. SFAS No.167 is effective for us beginning in the first quarter of fiscal year 2010. We are currently evaluating the impact that the adoption of SFAS No.167 will have on our consolidated financial statements.

Fair Value

Fair Value
	6 Months Ended Jun. 27, 2009 USD / shares
Fair Value [Abstract]
Fair Value	Note 4: Fair Value SFAS No.157 defines fair value as 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, such as inherent risk, transfer restrictions, and risk of non-performance. Our financial instruments are measured and recorded at fair value, except for equity method investments, cost method investments, and most of our long-term debt. Our equity method and cost method investments are measured at fair value quarterly; however, they are only recorded at fair value when an impairment charge is recognized. Our non-financial assets, such as goodwill; intangible assets; and property, plant and equipment, are measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized. For financial instruments that are not recorded at fair value, we disclose fair value in accordance with FSP SFAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. The fair value of our non-marketable equity investments exceeded the carrying value by approximately $1.1billion as of June27, 2009 (the fair value exceeded the carrying value by approximately $300million as of December27, 2008). As of June27, 2009, we had non-marketable equity investments in an unrealized loss position of approximately $80million that had a fair value of approximately $350million (unrealized loss position of approximately $100million on non-marketable equity investments with a fair value of approximately $270million as of December 27, 2008). The fair value of these investments takes into account the movements of the equity and venture capital markets as well as changes in the interest rate environment, and other economic variables. The fair value of our long-term debt was approximately $65million lower than the long-term debt carrying value as of June27, 2009 on our consolidated condensed balance sheet (approximately $35million lower than the long-term debt carrying value as of December27, 2008). The fair value of our long-term debt takes into consideration credit rating changes, equity price movements, interest rate changes, and other economic variables. Fair Value Hierarchy SFAS No.157 establishes three levels of inputs that may be used to measure fair value: Level 1. Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities consist of certain of our money market fund deposits and marketable debt and equity instruments, including equity securities offsetting deferred compensation, that are traded in an active market with sufficient volume and frequency of transactions. Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuatio

Trading Assets

Trading Assets
	6 Months Ended Jun. 27, 2009 USD / shares
Trading Assets [Abstract]
Trading Assets	Note 5: Trading Assets Trading assets at fair value at the end of each period were as follows: June 27, 2009 Dec. 27, 2008 Net Net Unrealized Unrealized (In Millions) Gains (Losses) Fair Value Gains (Losses) Fair Value Marketable debt instruments $ (8 ) $ 2,284 $ (96 ) $ 2,863 Equity securities offsetting deferred compensation (21 ) 319 (41 ) 299 Total trading assets $ (29 ) $ 2,603 $ (137 ) $ 3,162 Net gains on marketable debt instruments that we classified as trading assets held at the reporting date were $59million in the second quarter of 2009 and $82million in the first half of 2009 (losses of $1million in the second quarter of 2008 and gains of $7million in the first half of 2008). Net losses on the related derivatives were $27million in the second quarter of 2009 and $13 million in the first half of 2009 (gains of $23million in the second quarter of 2008 and losses of $31million in the first half of 2008). We maintain certain equity securities which are classified as trading assets to generate returns that seek to offset changes in liabilities related to the equity market risk of certain deferred compensation arrangements. These deferred compensation liabilities were $411million as of June27, 2009 ($332million as of December27, 2008) and are included in other accrued liabilities. Net gains on equity securities offsetting deferred compensation arrangements still held at the reporting date were $36million in the second quarter of 2009 and $7million in the first half of 2009 (losses of $19million in the second quarter of 2008 and $64million in the first half of 2008).

Available for Sale Investments

Available for Sale Investments
	6 Months Ended Jun. 27, 2009 USD / shares
Available For Sale Investments [Abstract]
Available-for-Sale Investments	Note 6: Available-for-Sale Investments Available-for-sale investments as of June27, 2009 and December27, 2008 were as follows: June 27, 2009 December 27, 2008 Gross Gross Gross Gross Adjusted Unrealized Unrealized Adjusted Unrealized Unrealized (In Millions) Cost Gains Losses1 Fair Value Cost Gains Losses Fair Value Floating-rate notes $ 6,576 $ 10 $ (49 ) $ 6,537 $ 6,599 $ 3 $ (133 ) $ 6,469 Commercial paper 3,658 2 3,660 3,244 4 3,248 Bank time deposits2 582 3 585 606 2 608 Money market fund deposits 538 538 419 419 Marketable equity securities 398 115 513 393 2 (43 ) 352 Asset-backed securities 250 (60 ) 190 374 (43 ) 331 Corporate bonds 247 8 (19 ) 236 270 4 (6 ) 268 Total available-for-sale investments $ 12,249 $ 138 $ (128 ) $ 12,259 $ 11,905 $ 15 $ (225 ) $ 11,695 1 As of June27, 2009, unrealized non-credit-related other-than-temporary impairment losses recognized in other comprehensive income (loss)were not significant. 2 Bank time deposits were primarily issued by institutions outside the U.S. as of June 27, 2009 and December27, 2008. The available-for-sale investments that were in an unrealized loss position as of June27, 2009 and December27, 2008, aggregated by length of time that individual securities have been in a continuous loss position, were as follows: June 27, 2009 Less than 12 Months 12 Months or Greater Total Gross Gross Gross Unrealized Unrealized Unrealized (In Millions) Losses Fair Value Losses Fair Value Losses Fair Value Floating-rate notes $ (26 ) $ 1,482 $ (23 ) $ 2,282 $ (49 ) $ 3,764 Asset-backed securities (60 ) 183 (60 ) 183 Corporate bonds (19 ) 76 (19 ) 76 Total $ (26 ) $ 1,482 $ (102 ) $ 2,541 $ (128 ) $ 4,023 December 27, 2008 Less than 12 Months 12 Months or Greater Total Gross Gross Gross Unrealized Unrealized Unrealized (In Millions) Losses Fair Value Losses Fair Value Losses Fair Value Floating-rate notes $ (70 ) $ 2,933 $ (63 ) $ 1,701 $ (133 ) $ 4,634 Marketable equity securities (43 ) 322 (43 ) 322 Asset-backed securities (

Inventories

Inventories
	6 Months Ended Jun. 27, 2009 USD / shares
Inventories [Abstract]
Inventories	Note 7: Inventories Inventories at the end of each period were as follows: June 27, Dec. 27, (In Millions) 2009 2008 Raw materials $ 385 $ 608 Work in process 1,209 1,577 Finished goods 1,211 1,559 Total inventories $ 2,805 $ 3,744 The valuation of inventory requires us to estimate obsolete or excess inventory as well as inventory that is not of saleable quality. The determination of obsolete or excess inventory requires us to estimate the future demand for our products. Estimates of future demand for our products could change and result in additional inventory write-offs, which would negatively impact our gross margin.

Derivative Financial Instrument

Derivative Financial Instruments
	6 Months Ended Jun. 27, 2009 USD / shares
Derivative Financial Instruments [Abstract]
Derivative Financial Instruments	Note 8: Derivative Financial Instruments Our primary objective for holding derivative financial instruments is to manage currency exchange rate risk and interest rate risk, and to a lesser extent, equity market risk and commodity price risk. We currently do not enter into derivative instruments to manage credit risk; however, we manage our exposure to credit risk through our policies. We generally enter into derivative transactions with high-credit-quality counterparties and, by policy, limit the amount of credit exposure to any one counterparty based on our analysis of that counterpartys relative credit standing. The amounts subject to credit risk related to derivative instruments are generally limited to the amounts, if any, by which a counterpartys obligations exceed our obligations with that counterparty, because we enter into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions subject to International Swaps and Derivatives Association, Inc. (ISDA) agreements. A master netting arrangement may allow counterparties to net settle amounts owed to each other as a result of multiple, separate derivative transactions. Currency Exchange Rate Risk We are exposed to currency exchange risk on our non-U.S.-dollar-denominated investments in debt instruments and loans receivable, which are generally hedged with offsetting currency forward contracts, currency options, or currency interest rate swaps. A majority of our revenue, expense, and capital purchasing activities are transacted in U.S. dollars. However, certain operating expenditures and capital purchases are incurred in or exposed to other currencies, primarily the euro, the Israeli shekel, and the Japanese yen. We have established balance sheet and forecasted transaction currency risk management programs to protect against fluctuations in fair value and the volatility of future cash flows caused by changes in exchange rates. These programs reduce, but do not always entirely eliminate, the impact of currency exchange movements. In addition, as of the end of the second quarter of 2009, we had euro exposure related to our euro-denominated liability for the European Commission (EC)fine. For further information on the EC fine, see Note 23: Contingencies. 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 12months. 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)in stockholders equity and reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings, and within the same line item on the consolidated condensed statements of operations as the impact of the hedged transaction. Currency derivatives with fair value hedge accounting designation that utilize currency

Other Long Term Assets

Other Long Term Assets
	6 Months Ended Jun. 27, 2009 USD / shares
Other Long-Term Assets [Abstract]
Other Long-Term Assets	Note 9: Other Long-Term Assets Other long-term assets at the end of each period were as follows: June 27, Dec. 27, (In Millions) 2009 2008 Non-marketable equity method investments $ 2,700 $ 3,032 Non-marketable cost method investments 1,006 1,021 Identified intangible assets 666 775 Other 1,260 991 Total other long-term assets $ 5,632 $ 5,819 Long-term loans receivable are included in Other in the table above. See Note 4: Fair Value for further discussion on our loans receivable.

Equity Method Investments

Equity Method Investments
	6 Months Ended Jun. 27, 2009 USD / shares
Equity Method Investments [Abstract]
Equity Method Investments	Note 10: Equity Method Investments IMFT/IMFS Micron and Intel formed IM Flash Technologies, LLC (IMFT)in January2006 and IM Flash Singapore, LLP (IMFS)in February2007. We established these joint ventures to manufacture NAND flash memory products for Micron and Intel. We own a 49% interest in each of these ventures. Our investments were $1.5billion in IMFT and $308million in IMFS as of June27, 2009 ($1.7billion in IMFT and $329million in IMFS as of December27, 2008). Our investments in these ventures are classified within other long-term assets. During the first half of 2009, $218million was returned to Intel by IMFT, which is reflected as a return of equity method investment within investing activities on the consolidated condensed statements of cash flows ($91million during the first half of 2008). Our portion of IMFT costs, primarily related to product purchases and start-up costs, was approximately $185million during the second quarter of 2009 and approximately $395million during the first half of 2009 (approximately $275million during the second quarter of 2008 and approximately $525million during the first half of 2008). The amount due to IMFT for product purchases and services provided was approximately $90million as of June27, 2009 and approximately $190million as of December27, 2008. Subject to certain conditions, we originally agreed to contribute up to approximately $1.7billion for IMFS in the three years following the initial capital contributions, of which our maximum remaining commitment was approximately $1.3billion as of June27, 2009. Initial production at the IMFS fabrication facility, including the purchase and installation of manufacturing equipment, remains on hold. These joint ventures are variable interest entities as defined by FIN 46(R), because all costs of the joint ventures will be passed on to Micron and Intel through our purchase agreements. IMFT and IMFS are dependent upon Micron and Intel for any additional cash requirements. Our known maximum exposure to loss approximated our investment balances as of June27, 2009, which were $1.5billion in IMFT and $308million in IMFS ($1.7billion in IMFT and $329million in IMFS as of December27, 2008). As of June27, 2009, except for the amount due to IMFT and IMFS for product purchases and services, we did not incur any additional liabilities in connection with our interests in these joint ventures. In addition to the potential loss of our existing investments, our actual losses could be higher, as Intel and Micron are liable for other future operating costs and/or obligations of IMFT and IMFS. In addition, future cash calls could increase our investment balance and the related exposure to loss. Finally, as we are currently committed to purchasing 49% of IMFTs production output and production-related services, we may be required to purchase products at a cost in excess of realizable value. Micron and Intel are also considered related parties under the provisions of FIN 46(R). As a result, the primary beneficiary is the entity that is most closely associated with the joint ventures. To make that determination, we reviewed several factors. The most impo

Gains

Gains (Losses) on Equity Method Investments, Net
	6 Months Ended Jun. 27, 2009 USD / shares
Gains (Losses) on Equity Method Investments, Net [Abstract]
Gains (Losses) on Equity Method Investments, Net	Note 11: Gains (Losses) on Equity Method Investments, Net Gains (losses)on equity method investments, net included: Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, (In Millions) 2009 2008 2009 2008 Equity method losses, net $ (41 ) $ (42 ) $ (103 ) $ (92 ) Impairment charges (3 ) (2 ) (13 ) (4 ) Other, net 1 1 Total gains (losses)on equity method investments, net $ (44 ) $ (43 ) $ (116 ) $ (95 )

3_Gains

Gains (Losses) on Other Equity Investments, Net
	6 Months Ended Jun. 27, 2009 USD / shares
Gains (Losses) on Other Equity Investments, Net [Abstract]
Gains (Losses) on Other Equity Investments, Net	Note 12: Gains (Losses) on Other Equity Investments, Net Gains (losses)on other equity investments, net included: Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, (In Millions) 2009 2008 2009 2008 Impairment charges $ (36 ) $ (85 ) $ (105 ) $ (118 ) Gains on sales 9 15 10 34 Other, net 2 4 29 11 Total gains (losses)on other equity investments, net $ (25 ) $ (66 ) $ (66 ) $ (73 )

Interest and Other, Net

Interest and Other, Net
	6 Months Ended Jun. 27, 2009 USD / shares
Interest and Other, Net [Abstract]
Interest and Other, Net	Note 13: Interest and Other, Net The components of interest and other, net were as follows: Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, (In Millions) 2009 2008 2009 2008 Interest income $ 38 $ 137 $ 110 $ 335 Interest expense (1 ) (8 ) (1 ) (8 ) Other, net (6 ) 38 17 8 Total interest and other, net $ 31 $ 167 $ 126 $ 335

Acquisition

Acquisition
	6 Months Ended Jun. 27, 2009 USD / shares
Acquisition [Abstract]
Acquisition	Note 14: Acquisition Subsequent to the end of the second quarter of 2009, we completed the acquisition of Wind River Systems Inc., a leading software vendor in embedded devices, in exchange for $884 million to be paid to the stockholders of Wind River. We are currently in the process of completing the initial accounting for the acquisition.

Identified Intangible Assets

Identified Intangible Assets
	6 Months Ended Jun. 27, 2009 USD / shares
Identified Intangible Assets [Abstract]
Identified Intangible Assets	Note 15: Identified Intangible Assets We classify identified intangible assets within other long-term assets on the consolidated condensed balance sheets. Identified intangible assets consisted of the following as of June27, 2009: Gross Accumulated (In Millions) Assets Amortization Net Intellectual property assets $ 1,124 $ (546 ) $ 578 Acquisition-related developed technology 18 (7 ) 11 Other intangible assets 340 (263 ) 77 Total identified intangible assets $ 1,482 $ (816 ) $ 666 Identified intangible assets consisted of the following as of December27, 2008: Gross Accumulated (In Millions) Assets Amortization Net Intellectual property assets $ 1,206 $ (582 ) $ 624 Acquisition-related developed technology 22 (8 ) 14 Other intangible assets 340 (203 ) 137 Total identified intangible assets $ 1,568 $ (793 ) $ 775 All of our identified intangible assets are subject to amortization. We recorded the amortization of identified intangible assets on the consolidated condensed statements of operations as follows: intellectual property assets generally in cost of sales; acquisition-related developed technology in marketing, general and administrative; and other intangible assets as either a reduction of revenue or in marketing, general and administrative. The amortization expense was as follows: Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, (In Millions) 2009 2008 2009 2008 Intellectual property assets $ 38 $ 40 $ 74 $ 81 Acquisition-related developed technology $ 1 $ 1 $ 3 $ 2 Other intangible assets $ 36 $ 22 $ 60 $ 43 Based on identified intangible assets recorded as of June27, 2009, and assuming the underlying assets will not be impaired in the future, we expect amortization expense for each period to be as follows: (In Millions) 20091 2010 2011 2012 2013 Intellectual property assets $ 73 $ 137 $ 85 $ 74 $ 57 Acquisition-related developed technology $ 2 $ 5 $ 4 $ $ Other intangible assets $ 66 $ 11 $ $ $ 1 Reflects the remaining six months of 2009.

Restructuring and Asset Impairm

Restructuring and Asset Impairment Charges
	6 Months Ended Jun. 27, 2009 USD / shares
Restructuring and Asset Impairment Charges [Abstract]
Restructuring and Asset Impairment Charges	Note 16: Restructuring and Asset Impairment Charges The following table summarizes restructuring and asset impairment charges by plan: Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, (In Millions) 2009 2008 2009 2008 2009 restructuring program $ 88 $ $ 149 $ 2006 efficiency program 3 96 16 425 Total restructuring and asset impairment charges $ 91 $ 96 $ 165 $ 425 We may incur additional restructuring charges in the future for employee severance and benefit arrangements, and facility-related or other exit activities. 2009 Restructuring Program In the first quarter of 2009, management approved plans to restructure some of our manufacturing and assembly and test operations, and align our manufacturing and assembly and test capacity to current market conditions. These plans include closing two assembly and test facilities in Malaysia, one facility in the Philippines, and one facility in China; stopping production at a 200mm wafer fabrication facility in Oregon; and ending production at our 200mm wafer fabrication facility in California. Restructuring and asset impairment charges were as follows: Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, (In Millions) 2009 2008 2009 2008 Employee severance and benefit arrangements $ 88 $ $ 142 $ Asset impairment charges 7 Total restructuring and asset impairment charges $ 88 $ $ 149 $ The following table summarizes the restructuring and asset impairment activity for the 2009 restructuring program during the first half of 2009: Employee Severance and Asset (In Millions) Benefits Impairments Total Accrued restructuring balance as of December27, 2008 $ $ $ Additional accruals 143 7 150 Adjustments (1 ) (1 ) Cash payments (78 ) (78 ) Non-cash settlements (7 ) (7 ) Accrued restructuring balance as of June27, 2009 $ 64 $ $ 64 We recorded the additional accruals, net of adjustments, as restructuring and asset impairment charges. The remaining accrual as of June27, 2009 was related to severance benefits that are recorded within accrued compensation and benefits. The charges above include $142million that relate to employee severance and benefit arrangements for approximately 6,900 employees, and $7million in asset impairment charges. 2006 Efficiency Program In the third quarter of 2006, management approved several actions as part of a restructuring plan designed to improve operational efficiency and financial results. Restructuring and asset impairment charges were as follows: Three Months Ended Six Months Ended June 27,

Borrowings

Borrowings
	6 Months Ended Jun. 27, 2009 USD / shares
Borrowings [Abstract]
Borrowings	Note 17: Borrowings We have an ongoing authorization from our Board of Directors to borrow up to $3.0billion, including through the issuance of commercial paper. Maximum borrowings under our commercial paper program during the first half of 2009 were approximately $610million, although no commercial paper remained outstanding as of June27, 2009. In 2005, we issued $1.6billion of 2.95% junior subordinated convertible debentures (the 2005 debentures) due in 2035. The 2005 debentures pay cash interest of 2.95%. However, we recognize an effective interest rate of 6.45% on the carrying value of the debt. The effective rate is based on the rate for a similar instrument that does not have a conversion feature. We capitalized all interest associated with the 2005 debentures during the first half of 2009 and the first half of 2008. The 2005 debentures issued have an outstanding principal of $1.6billion and are reflected on our consolidated condensed balance sheets as follows: June 27, Dec. 27, (In Millions) 2009 2008 Equity component carrying amount $ 466 $ 466 Unamortized discount1 $ 696 $ 701 Net debt carrying amount $ 890 $ 886 1 Remaining amortization period of approximately 26years as of June27, 2009 The 2005 debentures are convertible, subject to certain conditions, into shares of our common stock. As of June27, 2009, the conversion rate was 32.1175 shares of common stock per $1,000 principal amount of debentures, representing an effective conversion price of approximately $31.14 per share of common stock. As of December27, 2008, the conversion rate was 31.7162 shares of common stock per $1,000 principal amount of debentures, representing an effective conversion price of approximately $31.53 per share of common stock. Holders can surrender the 2005 debentures for conversion at any time. The conversion rate adjusts for certain events outlined in the indenture governing the 2005 debentures (the indenture), such as quarterly dividend distributions in excess of 10 cents per share, but does not adjust for accrued interest. In addition, the conversion rate will increase for a holder who elects to convert the 2005 debentures in connection with certain share exchanges, mergers, or consolidations involving Intel, as described in the indenture. The 2005 debentures, which pay a fixed rate of interest semiannually, have a contingent interest component that will require us to pay interest based on certain thresholds and for certain events commencing on December15, 2010, as outlined in the indenture. The maximum amount of contingent interest that will accrue is 0.40% per year. The fair value of the related embedded derivative was $30million as of June27, 2009 ($36million as of December27, 2008). We can settle any conversion or repurchase of the 2005 debentures in cash or stock at our option. On or after December15, 2012, we can redeem, for cash, all or part of the 2005 debentures for the principal amount, plus any accrued and unpaid interest, if the closing price of Intel common stock has been at least 130% of the conversion price then in effect f

Employee Equity Incentive Plans

Employee Equity Incentive Plans
	6 Months Ended Jun. 27, 2009 USD / shares
Employee Equity Incentive Plans [Abstract]
Employee Equity Incentive Plans	Note 18: Employee Equity Incentive Plans Our equity incentive plans are broad-based, long-term retention programs intended to attract and retain talented employees and align stockholder and employee interests. In May2009, stockholders approved an extension of the 2006 Equity Incentive Plan (the 2006 Plan). Stockholders approved 134million additional shares for issuance, increasing the total shares of common stock available for issuance as equity awards to employees and non-employee directors to 428million shares. The approval also extended the expiration date of the 2006 Plan to June2012. The maximum shares to be awarded as non-vested shares (restricted stock) or non-vested share units (restricted stock units) were increased to 253million shares. As of June27, 2009, 216 million shares remained available for future grant under the 2006 Plan. In addition, stockholders approved an employee stock option exchange program (Option Exchange) that could commence within nine months from stockholder approval, as determined by the Board of Directors. The Option Exchange would provide Intel employees, except listed officers, the opportunity to exchange eligible stock options for a lesser number of new stock options with a lower exercise price that have approximately the same fair value as options surrendered. The new stock options granted as part of the exchange will vest in equal annual increments over a four-year period from date of grant and expire seven years from the grant date. An additional 235million shares were approved in the 2006 Plan to be used for the Option Exchange only and would be automatically cancelled to the extent not issued under stock options granted in the Option Exchange. In the second quarter of 2009, we began issuing restricted stock units with both a market condition and a service condition (market-based restricted stock units), which were referred to in our 2009 Proxy Statement as outperformance stock units, to a small group of senior officers. The number of shares of Intel common stock the senior officer receives at vesting will range from 33% to 200% of the target amount, based on total shareholder return (TSR)on Intel common stock measured against the benchmark TSR of a peer group over a three year period. TSR is a measure of stock price appreciation plus any dividends paid in this performance period. As of June27, 2009, there were 2 million market-based restricted stock units outstanding. These market-based awards accrue dividend equivalents and vest three years and one month from the grant date. The 2006 Stock Purchase Plan allows eligible employees to purchase shares of our common stock at 85% of the average of the high and low price of our common stock on specific dates. Under the 2006 Stock Purchase Plan, 240million shares of common stock were made available for issuance through August2011. As of June27, 2009, 166million shares are available for issuance under the 2006 Stock Purchase Plan. Share-Based Compensation Share-based compensation recognized in the second quarter of 2009 was $258million and $471million for the first half of 2009 ($243million in the second quarter of 2008 and $46

Common Stock Repurchase Program

Common Stock Repurchase Program
	6 Months Ended Jun. 27, 2009 USD / shares
Common Stock Repurchase Program [Abstract]
Common Stock Repurchase Program	Note 19: Common Stock Repurchase Program We have an ongoing authorization, amended in November2005, from our Board of Directors to repurchase up to $25billion in shares of our common stock in open market or negotiated transactions. As of June27, 2009, $7.4billion remained available for repurchase under the existing repurchase authorization. During the second quarter and the first half of 2009, we did not make any common stock repurchases under our authorized plan. We repurchased 108.8million shares at a cost of $2.5 billion during the second quarter of 2008 and 230.7million shares at a cost of $5.0billion during the first half of 2008. We have repurchased and retired 3.3billion shares at a cost of approximately $67billion since the program began in 1990. Subsequent to the second quarter of 2009, we issued $2.0billion of 3.25% junior subordinated convertible debentures due in 2039. We utilized the majority of the proceeds to repurchase shares of our common stock. See Note 17: Borrowings in the Notes to Consolidated Condensed Financial Statements of this Form 10-Q. Restricted Stock Unit Withholdings We issue restricted stock units as part of our equity incentive plans. For the majority of restricted stock units granted, the number of shares issued on the date the restricted stock units vest is net of the statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. During the first half of 2009, we withheld 5.2million shares (3.4million shares during the first half of 2008) to satisfy $79million ($77million during the first half of 2008) of employees tax obligations. Although shares withheld are not issued, they are treated as common stock repurchases in our financial statements, as they reduce the number of shares that would have been issued upon vesting.

Earnings

Earnings (Loss) Per Share
	6 Months Ended Jun. 27, 2009 USD / shares
Earnings (Loss) Per Share [Abstract]
Earnings (Loss) Per Share	Note 20: Earnings (Loss) Per Share We computed our basic and diluted earnings (loss)per common share as follows: Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, (In Millions, Except Per Share Amounts) 2009 2008 2009 2008 Net income (loss)available to common shareholders1 $ (398 ) $ 1,601 $ 231 $ 3,044 Weighted average common shares outstanding basic 5,595 5,699 5,584 5,743 Dilutive effect of employee equity incentive plans 50 21 46 Dilutive effect of convertible debt 51 51 51 Weighted average common shares outstanding diluted 5,595 5,800 5,656 5,840 Basic earnings (loss)per common share $ (0.07 ) $ 0.28 $ 0.04 $ 0.53 Diluted earnings (loss)per common share $ (0.07 ) $ 0.28 $ 0.04 $ 0.52 1 Net income available to participating securities was not material for the second quarter and first half of 2009. We computed our basic earnings (loss)per common share using net income (loss)available to common shareholders and the weighted average number of common shares outstanding during the period. We computed diluted earnings (loss)per common share using net income (loss) available to common shareholders and the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Potentially dilutive common shares are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding restricted stock units, and the assumed issuance of common stock under the stock purchase plan, and applying the if-converted method for the assumed conversion of debt. Due to our net loss in the second quarter of 2009, the assumed exercise of outstanding stock options, the assumed vesting of outstanding restricted stock units, the assumed issuance of common stock under the stock purchase plan, and the assumed conversion of debt had an antidilutive effect. If we had recognized net income, the dilutive effect of employee equity incentive plans would have been 32million shares and the dilutive effect of convertible debt would have been 51million shares. For the first six months of 2009, we excluded 578million outstanding weighted average stock options (466million for the second quarter of 2008 and 478million for the first six months of 2008) from the calculation of diluted earnings per common share because the exercise prices of these stock options were greater than or equal to the average market value of the common shares. These options could be included in the calculation in the future if the average market value of the common shares increases and is greater than the exercise price of these options.

Comprehensive Income

Comprehensive Income (Loss)
	6 Months Ended Jun. 27, 2009 USD / shares
Comprehensive Income (Loss) [Abstract]
Comprehensive Income (Loss)	Note 21: Comprehensive Income (Loss) The components of total comprehensive income (loss)were as follows: Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, (In Millions) 2009 2008 2009 2008 Net income (loss) $ (398 ) $ 1,601 $ 231 $ 3,044 Change in net unrealized holding gain (loss)on available-for-sale investments1 141 107 198 (185 ) Change in net unrealized holding gain (loss)on derivatives 85 (50 ) 31 53 Change in net actuarial loss 11 11 Total comprehensive income (loss) $ (161 ) $ 1,658 $ 471 $ 2,912 1 Beginning in the second quarter of 2009, non-credit-related other-than-temporary impairment losses are included as a component of total comprehensive income (loss)due to the adoption of FSP 115-2. The components of accumulated other comprehensive income (loss), net of tax, at the end of each period were as follows: June 27, Dec. 27, (In Millions) 2009 2008 Accumulated net unrealized holding gain (loss)on available-for-sale investments1 $ 59 $ (139 ) Accumulated net unrealized holding gain (loss)on derivatives 79 48 Accumulated net prior service costs (10 ) (10 ) Accumulated net actuarial losses (279 ) (290 ) Accumulated transition obligation (2 ) (2 ) Total accumulated other comprehensive income (loss) $ (153 ) $ (393 ) 1 As of June27, 2009, accumulated unrealized non-credit-related other-than-temporary impairment losses on available-for-sale debt instruments were not significant.

Taxes

Taxes
	6 Months Ended Jun. 27, 2009 USD / shares
Taxes [Abstract]
Taxes	Note 22: Taxes Provision for taxes Based on our analysis, the EC fine is not tax deductible. For further information on the EC fine, see Note 23: Contingencies. The EC fine of $1.447 billion, with no associated reduction in the provision for taxes, significantly impacted our effective tax rate for the three and six months ended June27, 2009. As the EC fine was not deductible, we incurred a provision for taxes in the second quarter of 2009 despite a net loss before taxes. Unrecognized tax benefits Our gross unrecognized tax benefit was $536million as of June27, 2009 ($744million as of December27, 2008). Although the timing of the resolution and/or closure on audits is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12months. Given the number of years remaining subject to examination and the number of matters being examined, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. However, we can reasonably expect a minimum reduction of $280million of our existing gross unrealized tax benefits upon settlement or effective settlement with the various tax authorities, the closure of certain audits, and the lapse of statute of limitations within the next 12months.

Contingencies

Contingencies
	6 Months Ended Jun. 27, 2009 USD / shares
Contingencies [Abstract]
Contingencies	Note 23: Contingencies Legal Proceedings We are currently a party to various legal proceedings, including those noted in this section. While management presently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm the companys financial position, cash flows, or overall trends in results of operations, legal proceedings are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include money damages or, in matters for which injunctive relief or other conduct remedies are sought, an injunction prohibiting us from selling one or more products at all or in particular ways. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact on our business, results of operation, financial position, and overall trends. Except as may be otherwise indicated, the outcomes in these matters are not reasonably estimable. Advanced Micro Devices, Inc. (AMD)and AMD International Sales Service, Ltd. v. Intel Corporation and Intel Kabushiki Kaisha, and Related Consumer ClassActions and Government Investigations A number of proceedings, described below, generally challenge certain of our competitive practices, contending generally that we improperly condition price rebates and other discounts on our microprocessors on exclusive or near exclusive dealing by some of our customers. We believe that we compete lawfully and that our marketing practices benefit our customers and our stockholders, and we will continue to vigorously defend ourselves. The distractions caused by challenges to our business practices, however, are undesirable, and the legal and other costs associated with defending our position have been and continue to be significant. We assume, as should investors, that these challenges could continue for a number of years and may require the investment of substantial additional management time and substantial financial resources to explain and defend our position. While management presently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm the companys financial position, cash flows, or overall trends in results of operations, these litigation matters and the related government investigations are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include substantial money damages and, in matters in which injunctive relief or other conduct remedies are sought, an injunction or other order prohibiting us from selling one or more products at all or in particular ways. Were unfavorable final outcomes to occur, our business, results of operations, financial position, and overall trends could be materially harmed. In June2005, AMD filed a complaint in the United States District Court for the District of Delaware alleging that we and our Japanese subsidiary engaged in various actions in violation of the Sherman Act and the California Business and Professions Code, including, among other things, providing discounts and rebates to our manufacturer and distributor customers conditioned

Operating Segment Information

Operating Segment Information
	6 Months Ended Jun. 27, 2009 USD / shares
Operating Segment Information [Abstract]
Operating Segment Information	Note 24: Operating Segment Information Our operating segments as of June27, 2009 included the Digital Enterprise Group, Mobility Group, NAND Solutions Group, Digital Home Group, Digital Health Group, and Software and Services Group. Prior-period amounts have been adjusted retrospectively to reflect minor reorganizations. The Chief Operating Decision Maker (CODM), as defined by SFAS No.131, Disclosures about Segments of an Enterprise and Related Information, (SFAS No.131), is our President and Chief Executive Officer. The CODM allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss). We report the financial results of the following operating segments: Digital Enterprise Group. Includes microprocessors and related chipsets and motherboards designed for the desktop (including high-end enthusiast PCs), nettop, and enterprise computing market segments; microprocessors and related chipsets for embedded applications; communications infrastructure components such as network processors and communications boards; wired connectivity devices; and products for network and server storage. Mobility Group. Includes microprocessors and related chipsets designed for the notebook and netbook market segments, wireless connectivity products, and products designed for the ultra-mobile market segment, which includes various handheld devices. The NAND Solutions Group, Digital Home Group, Digital Health Group, and Software and Services Group operating segments do not qualify as reportable segments as defined by SFAS No.131 and are included within the all other category. We have sales and marketing, manufacturing, finance, and administration groups. Expenses for these groups are generally allocated to the operating segments, and the expenses are included in the operating results reported below. Revenue for the all other category is primarily related to the sale of NAND flash memory products, microprocessors and related chipsets by the Digital Home Group, and NOR flash memory products. In the second quarter of 2008, we completed the divestiture of our NOR flash memory assets to Numonyx. At that time, we entered into supply and service agreements to provide products, services, and support to Numonyx following the close of the transaction. Revenue and expenses related to the supply and service agreements are included in the all other category. For further information on Numonyx, see Note 10: Equity Method Investments. In the second quarter of 2009, we incurred charges of $1.447billion (1.06billion) as result of the fine from the EC, see Note 23: Contingencies. This charge was included in the all other category. Additionally, the all other category includes certain corporate-level operating expenses and charges. These expenses and charges include: amounts included within restructuring and asset impairment charges; a portion of profit-dependent compensation and other expenses not allocated to the operating segments; results of operations of seed businesses that support our initiatives; and acquisition-related costs