2015 ANNUaL REPOrT (This page intentionally left blank) Letter From Your CEO Intel is evolving from a PC company to one that powers the infrastructure for an increasingly smart and connected world. While 2015 started with challenges in PC market demand as well as macroeconomic and currency conditions, we finished the year strong. Our financials demonstrate a strategy that’s working and provide a solid foundation for growth. Intel reported full-year revenue of $55.4 billion, which was nearly flat versus 2014. Record revenue in the data center, Internet of Things, and memory businesses mostly offset the decline in PC demand. These businesses made up 40% of our revenue and delivered $2.2 billion in profitable revenue growth. This was the first year that these growth areas made up the majority of our operating profit. We also sharpened the focus of our Intel Security Group and exceeded our previously stated goal of improving mobile profitability by $800 million. Intel’s business model is evolving While the client computing business will continue to be a valuable source of cash flow and intellectual property (IP), our business model is evolving. The data center and Internet of Things businesses are the primary growth engines for Intel, and memory and field-programmable gate arrays (FPGAs) can accelerate these opportunities—forming and fueling a virtuous cycle of growth. The ability to integrate and reuse IP across a broad portfolio of products also differentiates our strategy and allows us to evolve in new ways. We reuse IP from our client computing business, for example. We also plan to reuse the IP we gained with our acquisition of Altera to deliver a new class of integrated microprocessor and FPGA products for our data center and Internet of Things customers. Expanding the boundaries of technology Intel’s relentless pursuit of Moore’s Law is foundational to our strategy and another valuable differentiator. Our manufacturing leadership allows us to continuously push the limits of performance and functionality. As a result, we expand the boundaries of technology to make the most amazing experiences possible. I’m proud that in addition to delivering solid financials that demonstrate our evolution, we delivered innovation. We launched our best processor ever—the 14-nanometer 6th generation Intel® Core™ processor—and a new, low-power Intel® Curie™ processor for wearables and other Internet of Things devices. We also announced 3D XPoint™ technology, a revolutionary new class of memory, and kicked off an ambitious cloud computing initiative that is accelerating public, private, and hybrid cloud adoption. Setting challenging goals to evolve how we do business At Intel, we also tackle significant societal challenges, setting transparent and ambitious goals to address corporate responsibility issues. In 2015, we launched our Diversity and Inclusion initiative, setting a bold hiring and retention goal to achieve full1 representation of women and underrepresented minorities in Intel’s U.S. workforce by 2020. I’m also incredibly proud that a thorough compensation analysis showed we’re at 100% gender pay parity for U.S. employees across job types and levels.2 In addition, we continued our efforts to establish a conflict-free 3 supply chain for Intel products. Maintaining accountability in the supply chain will be an ongoing process for Intel. A strong foundation for growth In 2015, we delivered results that showed our strategy is working. As we move forward, we will continue to focus on flawless execution and making amazing experiences possible. We’ll also broaden our data center and Internet of Things product portfolios with the Altera acquisition. In summary, we’ll continue pivoting to power the infrastructure for the smart and connected world as we diversify beyond our PC business. We’ve built a strong foundation for long-term growth for the company, but there’s more work to do to continue Intel’s evolution. Brian M. Krzanich, Chief Executive Officer Past performance does not guarantee future results. This Annual Report contains forward-looking statements, and actual results could differ materially. Risk factors that could cause actual results to differ are set forth in the “Risk Factors” section and throughout our 2015 Form 10-K, which is included in this Annual Report. These risk factors are subject to update by our future filings and submissions with the U.S. Securities and Exchange Commission and earnings releases. 1 Full representation (or full workforce representation) is the point at which Intel’s workforce in the U.S. matches the supply of skilled talent available (market availability) for current roles at Intel. 2 Parity is the quality or state of being equal or equivalent. Data does not include subsidiaries. 3 “Conflict free” as used here refers to supply chains whose sources of conflict minerals (tantalum, tin, tungsten and/or gold) do not, based on our due diligence, finance or benefit armed groups in the Democratic Republic of the Congo or adjoining countries. Additional information about Intel’s conflict-free efforts is available at conflictfree.intel.com. (This page intentionally left blank) Letter From Your Chairman Financial Results Intel is a technology company. We invent things. Our obligation to you, the owners, is to take those inventions Net Revenue and create business value to earn a return on our efforts. Dollars in billions Many of the Board’s strategic conversations in 2015 60 55.9 54.0 55.4 focused on how best to allocate resources for stockholder 50 53.3 52.7 value. The company is investing more in growing and 43.6 40 emerging businesses in the data center, Internet of Things, 38.3 37.6 35.4 35.1 and memory. And it is spending less in mature, less 30 profitable, or less strategic businesses. 20 In the data center, we have strengthened the core CPU franchise and also expanded it with investments in new capabilities, such as fabrics, silicon 10 photonics, and customization. The data center is Intel’s most significant opportunity for potential growth. 06 07 08 09 10 11 12 13 14 15 The Internet of Things segment is achieving high growth rates as it builds on its traditional embedded processor business and finds new opportunities in the cloud with solutions and technologies from across the company. This also adds value to other businesses at Intel. Diluted Earnings Per Share Dollars The memory segment continues to innovate and achieve high and profitable 2.50 growth with NAND technology and solid-state drive (SSD) solutions. The 2.39 2.31 2.33 2.13 introduction of 3D NAND and 3D XPoint technologies has the potential to help 2.00 us deliver better solutions to customers in the data center and other businesses 1.89 in the company. 1.50 The PC business continues to be a vital source of technology, production volume, 1.00 and profits. We are maximizing the return in a difficult environment. Continuing product innovation and segmentation have helped protect pricing even as unit .50 volume declines. Many of the strategic investments that have made this possible are also key to building other businesses at Intel. The foundation for all of this is silicon technology. Moore’s Law has defined our 2011 2012 2013 2014 2015 past and will shape our business and company for years to come. The Board made a large allocation of capital in 2015 to fund the acquisition of Altera, which closed in 2016. We expect Altera to augment efforts in the data Dividends Per Share Paid center and Internet of Things. We have also increased capital commitments to Dollars new memory technologies that are enabling important opportunities for the 1.00 0.96 non-volatile SSD and data center businesses. And we continue to invest in 0.87 0.90 0.90 leading-edge manufacturing capabilities. 0.80 0.78 As part of its regular review of cash policy, the Board approved an eight-cent 0.60 increase in the cash dividend to $1.04 on an annual basis, beginning in the first quarter of 2016. Intel repurchased $3.0 billion worth of Intel stock in 2015. The 0.40 total cash returned to stockholders through dividends and repurchases in 2015 was $7.6 billion. 0.20 One of the highlights of the last year for me personally was the public dialogue around the 50th anniversary of Moore’s Law. It was encouraging to see the interest it generated, with thousands of stories reaching millions of people in 2011 2012 2013 2014 2015 39 countries. People often think that Moore’s Law is all about technology. In fact, Gordon’s original paper was about economics. As with each of our founders, Gordon made Cash from Operations the successful transition from scientist to businessman. He understood the Dollars in billions obligation to owners and the need to connect innovation to business. 25 That tradition is very much alive today at Intel. The mandates to innovate and to 20 21.0 20.8 20.4 create business value remain important aspects of Intel culture. So does the 18.9 19.0 emphasis on execution and results. 15 This is a time of significant change. There is more work to do, and we expect to report continuing progress. 10 5 2011 2012 2013 2014 2015 Andy D. Bryant, Chairman of the Board (This page intentionally left blank) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 26, 2015. or ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to .