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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
If a cash flow hedge is discontinued because it is no longer probable that the original hedged transaction will occur as
anticipated, the unrealized gain or loss on the related derivative is reclassified into earnings. Subsequent gains or losses on the
related derivative instrument are recognized in interest and other, net in each period until the instrument matures, is
terminated, is re-designated as a qualified hedge, or is sold. Ineffective portions of cash flow hedges and fair value hedges, as
well as amounts excluded from the assessment of effectiveness, are recognized in earnings in interest and other, net. For
further discussion of our derivative instruments, see “Note 8: Derivative Financial Instruments.”
Securities Lending
We may enter into securities lending agreements with financial institutions, generally to facilitate hedging and certain
investment transactions. Selected securities may be loaned, secured by collateral in the form of cash or securities. The loaned
securities continue to be carried as investment assets on our consolidated balance sheets. Cash and cash equivalent collateral is
recorded as an asset with a corresponding liability. For lending agreements collateralized by securities, we do not record the
collateral as an asset or a liability, unless the collateral is repledged.
Loans Receivable
We make loans to third parties that are classified within other current assets or other long-term assets. We may elect the fair
value option for loans when the interest rate or foreign exchange rate risk is economically hedged at inception with a related
derivative instrument. We record the gains or losses on these loans arising from changes in fair value due to interest rate,
currency market fluctuations, and credit market volatility, offset by losses or gains on the related derivative instruments, in
interest and other, net. Loans that are denominated in U.S. dollars and have a floating-rate coupon are carried at amortized
cost. We measure interest income for all loans receivable using the interest method, which is based on the effective yield of the
loans rather than the stated coupon rate.
Inventories
We compute inventory cost on a currently adjusted standard basis (which approximates actual cost on an average or
first-in, first-out basis). Inventories at year-ends were as follows:
Property, Plant and Equipment
Property, plant and equipment, net at year-ends was as follows:
We compute depreciation for financial reporting purposes using the straight-line method over the following estimated useful
lives: machinery and equipment, 2 to 4 years; buildings, 4 to 40 years.
We capitalize interest on borrowings related to eligible capital expenditures. Capitalized interest is added to the cost of
qualified assets and amortized over the estimated useful lives of the assets. We record capital-related government grants
earned as a reduction to property, plant and equipment.
55
(In Millions)
2010
2009
Raw materials
$
471
$
437
Work in process
1,887
1,469
Finished goods
1,399
1,029
Total inventories
$
3,757
$
2,935
(In Millions)
2010
2009
Land and buildings
$
17,421
$
16,687
Machinery and equipment
30,421
28,339
Construction in progress
2,639
2,796
Total property, plant and equipment, gross
50,481
47,822
Less:
accumulated depreciation
(32,582
)
(30,597
)
Total property, plant and equipment, net
$
17,899
$
17,225