Microsoft Excel LibreOffice Calc

Intel Corp. (INTC)

Analysis of Goodwill and Intangible Assets

Advanced level

Goodwill and Intangible Asset Disclosure

Intel Corp., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016 Dec 26, 2015
Developed technology 9,407  9,611  8,912  7,405  2,928 
Customer relationships and brands 2,160  2,179  2,195  1,536  1,797 
Licensed technology and patents 2,975  2,932  3,104  3,285  3,017 
Identified intangible assets subject to amortization, gross assets 14,542  14,722  14,211  12,226  7,742 
Accumulated amortization (5,964) (4,954) (3,634) (3,540) (4,750)
Identified intangible assets subject to amortization, net 8,578  9,768  10,577  8,686  2,992 
Acquisition-related brands —  —  —  —  767 
In-process R&D 1,664  1,497  2,168  808  102 
Other non-amortizing intangibles 585  571  —  —  72 
Identified intangible assets not subject to amortization 2,249  2,068  2,168  808  941 
Identified intangible assets 10,827  11,836  12,745  9,494  3,933 
Goodwill 26,276  24,513  24,389  14,099  11,332 
Identified intangible assets and goodwill 37,103  36,349  37,134  23,593  15,265 

Based on: 10-K (filing date: 2020-01-24), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-12).

Item Description The company
Identified intangible assets Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Intel Corp.’s identified intangible assets decreased from 2017 to 2018 and from 2018 to 2019.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intel Corp.’s goodwill increased from 2017 to 2018 and from 2018 to 2019.
Identified intangible assets and goodwill Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Intel Corp.’s identified intangible assets and goodwill decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Adjustments to Financial Statements: Removal of Goodwill

Intel Corp., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016 Dec 26, 2015
Adjustment to Total Assets
Total assets (as reported) 136,524  127,963  123,249  113,327  103,065 
Less: Goodwill 26,276  24,513  24,389  14,099  11,332 
Total assets (adjusted) 110,248  103,450  98,860  99,228  91,733 
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 77,504  74,563  69,019  66,226  61,085 
Less: Goodwill 26,276  24,513  24,389  14,099  11,332 
Stockholders’ equity (adjusted) 51,228  50,050  44,630  52,127  49,753 

Based on: 10-K (filing date: 2020-01-24), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-12).

Intel Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Intel Corp., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016 Dec 26, 2015
Total Asset Turnover
Reported total asset turnover 0.53 0.55 0.51 0.52 0.54
Adjusted total asset turnover 0.65 0.68 0.63 0.60 0.60
Financial Leverage
Reported financial leverage 1.76 1.72 1.79 1.71 1.69
Adjusted financial leverage 2.15 2.07 2.22 1.90 1.84
Return on Equity (ROE)
Reported ROE 27.16% 28.24% 13.91% 15.58% 18.70%
Adjusted ROE 41.09% 42.06% 21.51% 19.79% 22.95%
Return on Assets (ROA)
Reported ROA 15.42% 16.45% 7.79% 9.10% 11.08%
Adjusted ROA 19.09% 20.35% 9.71% 10.40% 12.45%

Based on: 10-K (filing date: 2020-01-24), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-12).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Intel Corp.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Intel Corp.’s adjusted financial leverage ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Intel Corp.’s adjusted ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Intel Corp.’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Intel Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016 Dec 26, 2015
As Reported
Selected Financial Data (US$ in millions)
Net revenue 71,965  70,848  62,761  59,387  55,355 
Total assets 136,524  127,963  123,249  113,327  103,065 
Activity Ratio
Total asset turnover1 0.53 0.55 0.51 0.52 0.54
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net revenue 71,965  70,848  62,761  59,387  55,355 
Adjusted total assets 110,248  103,450  98,860  99,228  91,733 
Activity Ratio
Adjusted total asset turnover2 0.65 0.68 0.63 0.60 0.60

Based on: 10-K (filing date: 2020-01-24), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-12).

2019 Calculations

1 Total asset turnover = Net revenue ÷ Total assets
= 71,965 ÷ 136,524 = 0.53

2 Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 71,965 ÷ 110,248 = 0.65

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Intel Corp.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016 Dec 26, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 136,524  127,963  123,249  113,327  103,065 
Stockholders’ equity 77,504  74,563  69,019  66,226  61,085 
Solvency Ratio
Financial leverage1 1.76 1.72 1.79 1.71 1.69
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 110,248  103,450  98,860  99,228  91,733 
Adjusted stockholders’ equity 51,228  50,050  44,630  52,127  49,753 
Solvency Ratio
Adjusted financial leverage2 2.15 2.07 2.22 1.90 1.84

Based on: 10-K (filing date: 2020-01-24), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-12).

2019 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 136,524 ÷ 77,504 = 1.76

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 110,248 ÷ 51,228 = 2.15

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Intel Corp.’s adjusted financial leverage ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016 Dec 26, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 21,048  21,053  9,601  10,316  11,420 
Stockholders’ equity 77,504  74,563  69,019  66,226  61,085 
Profitability Ratio
ROE1 27.16% 28.24% 13.91% 15.58% 18.70%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 21,048  21,053  9,601  10,316  11,420 
Adjusted stockholders’ equity 51,228  50,050  44,630  52,127  49,753 
Profitability Ratio
Adjusted ROE2 41.09% 42.06% 21.51% 19.79% 22.95%

Based on: 10-K (filing date: 2020-01-24), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-12).

2019 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 21,048 ÷ 77,504 = 27.16%

2 Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 21,048 ÷ 51,228 = 41.09%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Intel Corp.’s adjusted ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016 Dec 26, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 21,048  21,053  9,601  10,316  11,420 
Total assets 136,524  127,963  123,249  113,327  103,065 
Profitability Ratio
ROA1 15.42% 16.45% 7.79% 9.10% 11.08%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 21,048  21,053  9,601  10,316  11,420 
Adjusted total assets 110,248  103,450  98,860  99,228  91,733 
Profitability Ratio
Adjusted ROA2 19.09% 20.35% 9.71% 10.40% 12.45%

Based on: 10-K (filing date: 2020-01-24), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-12).

2019 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 21,048 ÷ 136,524 = 15.42%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 21,048 ÷ 110,248 = 19.09%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Intel Corp.’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.