Intel 2012 Annual Report Download - page 44

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In summary, our cash flows were as follows:
(In Millions)
2012
2011
2010
Net cash provided by operating activities ................................................................
$ 18,884
$ 20,963
$ 16,692
Net cash used for investing activities ........................................................................
(14,060)
(10,301)
(10,539)
Net cash used for financing activities ........................................................................
(1,408)
(11,100)
(4,642)
Effect of exchange rate fluctuations on cash and cash equivalents..........................
(3)
5
—
Net increase (decrease) in cash and cash equivalents .......................................
$ 3,413
$ (433)
$ 1,511
Operating Activities
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in certain assets and
liabilities.
For 2012 compared to 2011, the $2.1 billion decrease in cash provided by operating activities was due to lower net
income and changes in our working capital, partially offset by adjustments for non-cash items. The adjustments for
non-cash items were higher due primarily to higher depreciation in 2012 compared to 2011, partially offset by increases in
non-acquisition-related deferred tax liabilities as of December 31, 2011 compared to December 25, 2010.
Changes in assets and liabilities as of December 29, 2012 compared to December 31, 2011 included higher inventories
on the ramp of 3rd generation Intel® Core™ processor family products, partially offset by a significant reduction in older-
generation products.
For 2012, our three largest customers accounted for 43% of our net revenue (43% in 2011 and 46% in 2010), with
Hewlett-Packard Company accounting for 18% of our net revenue (19% in 2011 and 21% in 2010), Dell accounting for
14% of our net revenue (15% in 2011 and 17% in 2010), and Lenovo accounting for 11% of our net revenue (9% in 2011
and 8% in 2010). These three customers accounted for 33% of our accounts receivable as of December 29, 2012
(36% as of December 31, 2011).
For 2011 compared to 2010, the $4.3 billion increase in cash provided by operating activities was due to adjustments for
non-cash items and higher net income. The adjustments for non-cash items were higher for 2011 compared to 2010,
primarily due to higher depreciation and amortization of intangibles, as well as increases in non-acquisition-related
deferred tax liabilities as of December 31, 2011 compared to December 25, 2010. Income taxes paid, net of refunds, in
2011 compared to 2010 were $1.3 billion lower, largely due to the tax benefit of depreciating 100% of assets placed in
service in the U.S. in 2011.
Investing Activities
Investing cash flows consist primarily of capital expenditures; investment purchases, sales, maturities, and disposals; as
well as cash used for acquisitions.
The increase in cash used for investing activities in 2012 compared to 2011 was primarily due to net purchases of
available-for-sale investments and trading assets in 2012, as compared to net maturities and sales of available-for-sale
investments and trading assets in 2011, partially offset by a decrease in cash paid for acquisitions. Net purchases of
available-for-sale investments in 2012 included our purchase of $3.2 billion of equity securities in ASML during the third
quarter of 2012. Our capital expenditures were $11.0 billion in 2012 ($10.8 billion in 2011 and $5.2 billion in 2010).
Cash used for investing activities decreased slightly in 2011 compared to 2010. A decrease due to net maturities and
sales of available-for-sale investments in 2011 as compared to net purchases of available-for-sale investments in 2010
was offset by higher cash paid for acquisitions, of which the substantial majority was for our acquisition of McAfee in the
first quarter of 2011, and an increase in capital expenditures. The significant increase in capital expenditures in 2011
compared to 2010 was due to the expansion of our network of fabrication facilities to include an additional large-scale
fabrication facility, as well as bringing our 22nm process technology manufacturing capacity online.
Financing Activities
Financing cash flows consist primarily of repurchases of common stock, payment of dividends to stockholders, issuance
and repayment of long-term debt, and proceeds from the sale of shares through employee equity incentive plans.