Question

Using the 10K, you will answer the questions below related to Intel’s long term operating assets, both tangible and intangible.

Calculate the percent-depreciated ratio as of December 29, 2018 and December 30, 2017 using the formula on page 385/386 of the textbook. Discuss what this tells you about Intel’s long-term operating assets.

CONSOLIDATED BALANCE SHEETS Dec 29, Dec 30, (In MIllons, Except Par Value) 2018 2017 Asseta Current assets Cash and cash equlvalents 3.019 3.433 Short-term investments 2,788 1.814 Trading assets 5,843 8,755 Accounts recelvable, net of allowance for doubttul accounts of $33 (525 In 2017) 6,722 5.607 Inventorles 7.253 6,983 Other current assets 3,162 2,908 Total current assets 28,787 29,500 Property, plant and equipment, net 48,976 41,109 Equity Investments 6,042 8,579 Other long-tem Investments 3,388 3,712 Goodwill 24,513 24,389 Identined Intanglble assets, net 11,836 12,745 Other long-tem assets 4,421 3,215 Total assets $ 127,963 123,249 Llabilities, temporary equity, and stockholders" equlty Current llablitles Short-term debt 1,261 1,776 Accounts payable 3,824 2,928 Accrued compensation and benents 3,622 3,526 Deferred Income 1,656 Other accrued labilities 7,919 7,535 Total current llablilitles 16,626 17,421 Debt 25,098 25,037 Contract labililties 2,049 Income taxes payable, non-current 4,897 4,069 Deferred Income taxes 1.665 3,046 other long-term liabilities 3.791 2,646 Commitments and Contingencles (Note 21) Temporary equlty Stockholders' equity 419 866 Preferred stock, 50.001 par value, 50 shares authorized; none Issued Common stock, $0.001 par value, 10,000 shares authorlzed 4,516 shares Issued and outstanding (4,687 Issued and outstanding In 2017) and capltal in excess of par value 25,365 26.074 Accumulated other comprehensive Income (loss) (974) 862 Retained eamings 50.172 42.083 Total stockholders' equity 74,563 69,019 Total llabilities, temporary equity. and stockholdersa equity 127,963 123,245 CONSOLIDATED STATEMENTS OF CASH FLOWS Dec 30 Years Ended Dec 29, Dec 31, (In Millons) 2018 2017 2016 Cash and cash equivalents, beginning of perlod 3,433 5,560 15,308 Cash flows provided by (used for) operating activites: Net Income 21,053 9,601 10,316 Adjustments to reconcle net Income to net cash provided by operating activities: Depreclation 7,520 6,752 6,266 Share-based compensation 1,546 1,358 1,444 Amortization of intanglbles 1,377 1,565 1,524 (Galns) losses on equlty Investments, net 155 (2,583) (432) Loss on debt conversion and extingulshment 260 476 (Galns) losses on divestitures (497) (387) Deferred taxes 257 (1.749) 1,548 Changes in assets and llabilties Accounts recelvable (1,714) (781) 65 Inventories (214) (1,300) 119 Accounts payable 211 191 182 291 Accrued compensation and benefits (260) 311 Customer deposits and prepald supply agreements 1,367 1,105 1,382 Income taxes payable and recelvable 148 5.230 Other assets and lablites 41 (788) 394 12,509 Total adjustments 8,379 11,492 Net cash provided by operating activities 29,432 22,110 21,808 Cash flows provided by (used for) Investing activitles Addltions to property, plant and equlpment (15,181) (11,778) (9,625) Acquisitions, net of cash acquired (190) (14,499) (15,470) Purchases of avalable-for-sale debt Investments (3,843) (2,746) (9,269) Sales of avalable-for-sale debt Investments. 195 1.833 2,847 Maturtes of avallable-for-sale debt Investments 2.968 3,687 5,654 Purchases of trading assets (9,503) (13,700) (12,237) Maturtles and sales of trading assets 12,111 13,970 10,898 Purchases of equity Investments (874) (1,619) (963) Sales of equlty Investments 2,802 5,236 1,080 Proceeds from divestitures 548 3,124 Other Investing (272) 730 1.268 Net cash used for Investing activitles (25,817) (11,239) (15,762) Cash flows provided by (used for) financing activitles: Increase (decrease) In short-term debt, net 460 12 (15) Issuance of long-term debt, net of Issuance costs 7,716 423 2,734 Repayment of debt and debt oonverslon (3,026) (8,080) (1.500) Proceeds from sales of common stock through employee equity Incentive plans 555 770 1,108 Repurchase of common stock (10,730) (3,615) (2,587) Payment of dividends to stockholders (5,541) (5,072) (4,925) Other financing (748) (206) (554) Net cash provided by (used for) nnancing activities8 Net Increase (decrease) In cash and cash equlvalents (18,607) (8,475) (5,739) (414) (2,127) (9,748) Cash and cash equivalents, end of perlod 3,019 3,433 5,560 Supplemental dsclosures: Acqulsition of property, plant and equlpment Included In accounts payable and accrued labilitles 2,340 1,417 979 Non-marketable equity Investment in McAfee from divestiture 1,078 Cash pald durinq the year for Interest, net of capitallzed Interest 448 624 S 682 Income taxes, net of retunds 3.813 3,824 877 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Common Stock and Capltal Accumulated Other In Excess of Par Value Comprehenslve Income (Loss) Retalned Number of Shares (In Millons, Except Per Share Amounts) Amount Total Eamings Balance as of December 26, 2015 23.411 4,725 60 37,614 61,085 Components of comprehensive Income, net of tax Net Income 10,316 10.316 Other comprehensive Income (loss) A6 46 Total comprehenslve Income 10,362 Proceeds from sales of common stock through employee equity Incentive plans, net tax beneft, and other 101 1.322 1,322 Share-based compensation 1,438 1,438 Repurchase of common stock (81) (412) (2,180) (2,592) Restricted stock unit withholdings (15) (386) (78) (464) Cash dvidends declared ($1.04 per share of common stock) (4,925) (4,925) Balance as of December 31, 2016 25,373 4,730 106 40,747 66,226 Components of comprehensive Income, net of tax 9,601 Net Income 9,601 Other comprehensive Income (loss) 756 756 Total comprehensive Income 10.357 Proceeds from sales of common stock through employee equity Incentive plans, net excess tax beneft, and other 70 1,172 (1) 1,171 Share-based compensation 1,296 1,296 Convertible debt (894) (894) Repurchase of common stock (101) (552) (3,057) (3,609) Restricted stock unit withihold ings (12) (321) (135) (456) Cash dvidends declared ($1.0775 per share of common stock) (5,072) (5,072) 26.074 862 Balance as of December 30, 2017 4,687 42.083 69.019 Adjustment to opening balance for change In accounting principle (1,790) 2.424 634 Opening balance as of December 31, 2017 4.687 26,074 (928) 44,507 69.653 Components of comprehensive Income, net of tax Net Income 21.053 21,053 Other comprehensive Income (loss) (46) (45) 21,007 Total comprehensive Income Proceeds from sales of common stock through employee equity Incentive plans, net excess tax beneft, and other 56 424 424 Share-based compensation 1.548 1548 Percent depreciated = Accumulated depreciation Cost of depreciable assets

Answer 1

		(in Million)	(in Million)
		Dec 29, 2018	Dec 30, 2017
Property and Equipment, at cost:
Land and Buildings		$      30,954	$      27,391
Machinery and Equipment		$      66,721	$      57,192
Construction in Progress		$      16,643	$      15,812
	A	$ 1,14,318	$ 1,00,395
Less: Accumulated Depreciation	B	$      65,342	$      59,286
		$      48,976	$      41,109
Percent Depreciated	A / B	57.16%	59.05%

INTANGIBLE 2018

(in Million)		December 29, 2018
		Gross Assets	Accumulated Amortization	Net	Percentage
Acquisition related developed technology		$           9,611	$                3,021	$    6,590	31.43%
Acquisition related customer relationships and brands		$           2,179	$                   527	$    1,652	24.19%
Licensed technology		$           2,932	$                1,406	$    1,526	47.95%
Identified intangible assets subject to amortization		$         14,722	$                4,954	$    9,768	33.65%
In-process research and development		$           1,497	$                       -	$    1,497
Other intangible assets		$               571	$                       -	$        571
Identified intangible assets not subject to amortization		$           2,068	$                       -	$    2,068
Total identified intangible assets		$         16,790	$                4,954	$ 11,836	29.51%

INTANGIBLE 2017

(in Million)		December 29, 2017
		Gross Assets	Accumulated Amortization	Net	Percentage
Acquisition related developed technology		$           8,912	$                1,922	$    6,990	21.57%
Acquisition related customer relationships and brands		$           2,195	$                   342	$    1,853	15.58%
Licensed technology		$           3,104	$                1,370	$    1,734	44.14%
Identified intangible assets subject to amortization		$         14,211	$                3,634	$ 10,577	25.57%
In-process research and development		$           2,168	$                       -	$    2,168
Other intangible assets			$                       -	$           -
Identified intangible assets not subject to amortization		$           2,168	$                       -	$    2,168
Total identified intangible assets		$         16,379	$                3,634	$ 12,745	22.19%

In case of Tangibles, we can clearly see that the percent depreciated as reduced from 59% to 57%, whereas it should have been the other way. This is due to additions during the year 2018. Due to the additions made in the year 2018, the Gross Cost has increased resulting in reduced percentage depreciation for the year. Also, more than half of the company's tangible assets have been depreciated as on December 2018. The company is also buying new assets as and when required. It has made additions to the tune of $14,000 Million approximately during the year.

In case of Intangibles, the overall percentage increase from 22% to 29.5%. Percentage on assets subject to amortization increases from 25.5% to 33.6% during the year. This is because no significant additions have been made. This amount represents the depreciation charged for the period. Also, as on December 2018 almost 1/3rd of the Intangibles subject to amortization have been amortized.