Operating Segments and Geographic Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Operating Segments and Geographic Information [Text Block]

Note 4: Operating Segments and Geographic Information

Our operating segments as of December 31, 2016 included:

•    Client Computing Group (CCG)	•    Intel Security Group (ISecG)
•    Data Center Group (DCG)	•    Programmable Solutions Group (PSG)
•    Internet of Things Group (IOTG)	•    All Other
•    Non-Volatile Memory Solutions Group (NSG)	•    New Technology Group (NTG)

During the first quarter of 2016, we formed PSG as a result of our acquisition of Altera Corporation (Altera). For further information, see "Note 10: Acquisitions and Divestitures." All prior-period amounts have been retrospectively adjusted to reflect the way we internally manage and monitor segment performance starting in fiscal year 2016.

In the third quarter of 2016, we announced our planned divestiture of ISecG, which we expect to complete in the second quarter of 2017. For further information, see "Note 10: Acquisitions and Divestitures."

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

We manage our business activities primarily based on a product segmentation basis. We derive a substantial majority of our revenue from platforms, which is our principal product and source of revenue across our CCG, DCG, and IOTG operating segments.

CCG and DCG are our reportable operating segments. IOTG, NSG, ISecG, and PSG do not meet the quantitative thresholds to qualify as reportable operating segments; however, we have elected to disclose the results of these non-reportable operating segments. The NTG operating segment does not meet the quantitative thresholds to qualify as a reportable segment and NTG results are included within the "all other" category.

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

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

• results of operations from NTG;

• amounts included within restructuring and other charges;

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

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

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

• acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill.

The CODM does not evaluate operating segments using discrete asset information. Based on the interchangeable nature of our manufacturing and assembly and test assets, most of the related depreciation expense is not directly identifiable within our operating segments, as it is included in overhead cost pools and subsequently absorbed into inventory as each product passes through our manufacturing process. As our products are then sold across multiple operating segments, it is impracticable to determine the total depreciation expense included as a component of each operating segment’s operating income (loss) results. Operating segments do not record inter-segment revenue. We do not allocate gains and losses from equity investments, interest and other income, or taxes to operating segments. Although the CODM uses operating income to evaluate the segments, operating costs included in one segment may benefit other segments. Except for these differences, the accounting policies for segment reporting are the same as for Intel as a whole.

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

Years Ended (In Millions)	Dec 31, 2016			Dec 26, 2015			Dec 27, 2014
Net revenue:
Client Computing Group
Platform	$	30,751		$	30,680		$	33,235
Other	2,157			1,539			1,637
	32,908			32,219			34,872
Data Center Group
Platform	15,895			14,856			13,341
Other	1,341			1,125			1,055
	17,236			15,981			14,396
Internet of Things Group
Platform	2,290			1,976			1,814
Other	348			322			328
	2,638			2,298			2,142
Non-Volatile Memory Solutions Group	2,576			2,597			2,146
Intel Security Group	2,161			1,985			2,010
Programmable Solutions Group	1,669			—			—
All other	199			275			304
Total net revenue	$	59,387		$	55,355		$	55,870
Operating income (loss):
Client Computing Group	$	10,646		$	8,166		$	10,327
Data Center Group	7,520			7,847			7,380
Internet of Things Group	585			515			583
Non-Volatile Memory Solutions Group	(544		)	239			255
Intel Security Group	400			213			164
Programmable Solutions Group	(104		)	—			—
All other	(5,629		)	(2,978		)	(3,362		)
Total operating income	$	12,874		$	14,002		$	15,347

For 2016, our three largest customers accounted for 38% of our net revenue, with Dell Inc. (Dell) accounting for 15%, Lenovo Group Limited (Lenovo) accounting for 13%, and HP Inc. accounting for 10%. These three customers accounted for 31% of our accounts receivable as of December 31, 2016. Hewlett-Packard Company, our largest customer in 2014, separated into HP Inc. and Hewlett Packard Enterprise Company on November 1, 2015. In 2015, Hewlett-Packard Company, HP Inc., and Hewlett Packard Enterprise Company collectively accounted for 18% of our net revenue (18% in 2014), Dell accounted for 15% (16% in 2014), and Lenovo accounted for 13% (12% in 2014). Combined, these customers accounted for 46% of our net revenue in 2015 (46% in 2014) and 49% of our accounts receivable as of December 26, 2015. Substantially all of the revenue from these customers was from the sale of platforms and other components by the CCG and DCG operating segments.

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

Years Ended (In Millions)	Dec 31, 2016		Dec 26, 2015		Dec 27, 2014
China (including Hong Kong)	$	13,977	$	11,679	$	11,197
United States	12,957		11,121		9,828
Singapore	12,780		11,544		11,573
Taiwan	9,953		10,661		8,955
Other countries	9,720		10,350		14,317
Total net revenue	$	59,387	$	55,355	$	55,870

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

(In Millions)	Dec 31, 2016		Dec 26, 2015		Dec 27, 2014
United States	$	23,598	$	22,611	$	24,020
Ireland	4,865		5,789		5,433
Israel	3,923		1,661		1,957
Other countries	3,785		1,797		1,828
Total property, plant and equipment, net	$	36,171	$	31,858	$	33,238