Intel 2009 Annual Report Download - page 56

Download and view the complete annual report

Please find page 56 of the 2009 Intel annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 172

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172

Table of Contents
As of December 26, 2009, the fair value of our marketable equity securities and our equity derivative instruments, including
hedging positions, was $805 million ($362 million as of December 27, 2008). Our marketable equity securities include our
investments in Clearwire Corporation and Micron, carried at a fair market value of $250 million and $148 million,
respectively, as of December 26, 2009. To determine reasonably possible decreases in the market value of our marketable
equity investments, we analyzed the expected market price sensitivity of our marketable equity investment portfolio.
Assuming a loss of 50% in market prices, and after reflecting the impact of hedges and offsetting positions, the aggregate
value of our marketable equity investments could decrease by approximately $405 million, based on the value as of December
26, 2009 (a decrease in value of approximately $220 million, based on the value as of December 27, 2008 using an assumed
loss of 60%). The decrease in the assumed loss percentage from December 27, 2008 to December 26, 2009 is due to lower
expected overall equity market volatility.
Many of the same factors that could result in an adverse movement of equity market prices affect our non-marketable equity
investments, although we cannot always quantify the impact directly. Financial markets and credit markets are volatile, which
could negatively affect the prospects of the companies we invest in, their ability to raise additional capital, and the likelihood
of our being able to realize value in our investments through liquidity events such as initial public offerings, mergers, and
private sales. These types of investments involve a great deal of risk, and there can be no assurance that any specific company
will grow or become successful; consequently, we could lose all or part of our investment. Our non-marketable equity
investments, excluding investments accounted for under the equity method, had a carrying amount of $939 million as of
December 26, 2009 ($1.0 billion as of December 27, 2008). As of December 26, 2009, the carrying amount of our non-
marketable equity method investments was $2.5 billion ($3.0 billion as of December 27, 2008). A substantial majority of this
balance as of December 26, 2009 was concentrated in companies in the flash memory market segment. Our flash memory
market segment investments include our investment of $1.6 billion in IMFT/IMFS ($2.1 billion as of December 27, 2008) and
$453 million in Numonyx ($484 million as of December 27, 2008).
In February 2010, we signed a definitive agreement with Micron and Numonyx under which Micron agreed to acquire
Numonyx in an all
-stock transaction. The value of the Micron common stock that we would receive upon the closing of the
transaction is subject to equity market risk. For further information, see “Note 11: Non-Marketable Equity Investments” in
Part II, Item 8 of this Form 10-K.
48