e11vk
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2008
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-06217
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
INTEL CORPORATION 401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office
INTEL CORPORATION
2200 MISSION COLLEGE BOULEVARD
SANTA CLARA, CALIFORNIA, 95054-1549
INTEL CORPORATION 401(k) SAVINGS PLAN
Financial Statements and
Supplemental Schedules
As of December 31, 2008 and 2007, and
for the Year Ended December 31, 2008
Contents
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Financial Statements |
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35 |
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38 |
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39 |
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Report of Independent Registered Public Accounting Firm
The SERP Administrative Committee
Intel Corporation 401(k) Savings Plan
We have audited the accompanying statements of net assets available for benefits of Intel
Corporation 401(k) Savings Plan as of December 31, 2008 and 2007, and the related statement of
changes in net assets available for benefits for the year ended December 31, 2008. These financial
statements are the responsibility of the Plan’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. We
were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plan’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 2008 and 2007, and the
changes in its net assets available for benefits for the year ended December 31, 2008, in
conformity with US generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken
as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December
31, 2008, and delinquent participant contributions for the year ended
December 31, 2008, are presented for
purposes of additional analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor’s Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan’s management. The supplemental schedules have been
subjected to the auditing procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial statements taken
as a whole.
/s/ Ernst & Young, LLP
San Jose, California
June 19, 2009
1
Intel Corporation 401(k) Savings Plan
Statements of Net Assets Available for Benefits
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December 31 |
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2008 |
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2007 |
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Assets |
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Value of interest in master trust investment
accounts, at fair value |
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$ |
551,294,424 |
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$ |
111,522,209 |
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Investments, at fair value |
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2,394,162,737 |
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4,196,220,314 |
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Investment of securities lending collateral |
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— |
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3,745,496 |
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Receivables: |
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Interest and dividends receivable |
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1,442 |
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8,716 |
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Receivable from brokers for
securities sold |
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943,570 |
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1,422,130 |
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Employee contributions receivable |
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5,219,022 |
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7,157,362 |
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Total receivables |
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6,164,034 |
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8,588,208 |
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Total assets, at fair value |
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2,951,621,195 |
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4,320,076,227 |
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Liabilities |
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Payable for securities lending collateral |
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— |
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3,745,496 |
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Other accrued liabilities |
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5,527,328 |
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7,920,608 |
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Total liabilities, at fair value |
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5,527,328 |
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11,666,104 |
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Net assets available for benefits, at fair value |
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2,946,093,867 |
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4,308,410,123 |
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Adjustment from fair value to contract value for
fully benefit-responsive investment contracts
held by the Stable Value Fund master trust
investment account |
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6,604,779 |
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621,296 |
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Net assets available for benefits |
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$ |
2,952,698,646 |
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$ |
4,309,031,419 |
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See accompanying notes.
2
Intel Corporation 401(k) Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2008
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Additions to/(deductions from) net assets attributed to: |
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Employee contributions |
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$ |
385,074,365 |
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Interest and dividend income |
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128,903,402 |
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Net investment loss from participation in master trust
investment accounts |
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(164,592,985 |
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Net realized and unrealized depreciation in fair value of
investments |
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(1,455,538,397 |
) |
Benefits paid to participants and participant withdrawals |
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(249,425,708 |
) |
Administrative fees |
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(353,115 |
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Transfers to other plan |
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(400,335 |
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Net decrease |
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(1,356,332,773 |
) |
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Net assets available for benefits: |
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Beginning of year |
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4,309,031,419 |
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End of year |
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$ |
2,952,698,646 |
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See accompanying notes.
3
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements
December 31, 2008
1. Description of the Plan
The following description of the Intel Corporation 401(k) Savings Plan (the Plan) provides only
general information. Participants should refer to the plan document for a more complete description
of the Plan’s provisions.
General
The Plan is a defined contribution plan covering all eligible U.S. employees of Intel Corporation
(the company). Eligible employees may participate in the Plan any time on or after their date of
hire. The Plan was amended to require all employees who become eligible to participate on or after
January 1, 2007, to be automatically enrolled in the Plan unless they make an affirmative election
not to participate. Participants who are automatically enrolled will initially have 3% of their
compensation withheld and deposited in the appropriate LifeStage Fund, which invests in varying
percentages of equity securities and fixed-income debt instruments based on the participants’ age.
The Plan is intended to be qualified under Section 401(a) of the U.S. Internal Revenue Code of 1986
(the Code), as amended, and is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA), as amended.
Trustee
The Bank of New York Mellon, N.A. (Mellon) is the Plan’s trustee, and holds all investments of the
Plan and the Intel Corporation Master Trust (the Master Trust) directly or through a subtrust for
which Fidelity Management Trust Company is subtrustee.
Administration of the Plan
The Sheltered Employee Retirement Plan (SERP) Administrative Committee (as appointed by the Finance
Committee of the company) is the fiduciary responsible for the general operation and administration
of the Plan (but not management or control of Plan assets) and the Investment Policy Committee (as
appointed by the Finance Committee of the company) is the fiduciary responsible for the management
and control of Plan assets. The company is the plan sponsor, as defined by ERISA. Fidelity
Investments Institutional Operations Company provides recordkeeping services with respect to the
Plan.
4
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Contributions and Participant Accounts
Participant Contributions
Effective January 1, 2008, the Plan was amended to allow participants to make Roth 401(k)
contributions, as well as Roth 401(k) catch-up contributions for participants who are 50 years of
age or older. Participants may make pre-tax contributions, after-tax Roth 401(k) contributions, or
a combination of both, up to 50% of their annual compensation, provided the amounts do not exceed
the annual Internal Revenue Service (IRS) limits. Such contributions are withheld by the company
from each participant’s compensation and deposited in the appropriate investment option in
accordance with the participant’s directives. Participants who are 50 years of age or older by the
end of a particular plan year and have contributed the maximum amount allowed under the Plan for
that year are eligible to contribute an additional portion of their annual compensation as catch-up
contributions, up to the annual IRS limit. As of December 31, 2007, participants could elect to
invest in any combination of the available investment options offered under the Plan; however,
participants may not elect to invest more than 20% of their account in the Intel Stock Fund.
Participants may change their investment elections daily.
Participant Accounts
Separate accounts are maintained for each participant. The account balances are generally adjusted
as follows:
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Bi-weekly or semi-monthly for participant contributions. |
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Daily for a pro rata share of investment income or losses on the Plan’s investments
based on the ratio that each participant’s account bears to the total of all such
accounts. |
ESOP Conversion
The Plan was amended effective January 1, 2007, to convert the Intel Stock Fund into an employee
stock ownership plan (ESOP) in accordance with Code section 4975(e)(7). As such, participants will
have the option to receive dividends on their shares of stock held in the Intel Stock Fund
distributed in cash or reinvested within the Intel Stock Fund.
5
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Vesting
Participants are immediately 100% vested with respect to contributions to all investment options in
the Plan, as well as the related earnings from such contributions.
Payment of Benefits
Participants are eligible for a distribution of Plan benefits upon termination of service, whether
by disability, retirement, death or leaving the company. In the event of financial hardship (as
defined by the Plan), participants may withdraw money from their Plan accounts while they are still
employed. Upon termination of service, a participant or applicable beneficiary may elect to have
benefits paid in a single lump-sum distribution or monthly annuity payments, or may request that
the Plan make a direct transfer to another eligible retirement plan.
Participants who elect monthly annuity payments will have the balance of their accounts transferred
to the Intel Corporation Defined Benefit Pension Plan (Intel Pension Plan). An annuity is paid to
those participants based on the value of their Plan accounts in accordance with the terms of the
two plans. There were transfers under this option of $400,335 for the year ended December 31, 2008.
Participant Loans
All participants are permitted to obtain loans of up to 50% of their vested account balances in the
Plan up to a maximum of $50,000 when combined with all other loans from this Plan and the Intel
Corporation Profit Sharing Retirement Plan (Intel Profit Sharing Plan). The participants’ account
balances secure their loans. The interest rate is based on the prime rate plus 1% as reported in
The Wall Street Journal on the last business day of each month. The loan provisions are established
by the SERP Administrative Committee and administered by the record keeper.
Participants may choose to obtain loans from either this Plan or the Intel Profit Sharing Plan.
Repayments of loans are transferred to the participants’ Plan and Intel Profit Sharing Plan
accounts in the ratio in which such accounts provided funding for the loan.
6
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Administrative Expenses
A portion of the expenses for administration of the Plan are paid from asset based credits received
from certain mutual funds or directly by the Plan. Any remaining administrative expenses are paid
by the company.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of accounting in accordance
with U.S. generally accepted accounting principles.
Investment Valuation
A portion of the investments of the Plan are held in the Master Trust, which consists of the assets
of the Plan, the Intel Profit Sharing Plan, and the Intel Pension Plan. The Master Trust includes
multiple master trust investment accounts, in which different combinations of the above-mentioned
plans invest. Each participating plan shares in the assets and earnings of the master trust
investment accounts based on its respective interest in each master trust investment account. See
Note 3: Master Trust Investment Accounts for the detail of the investments held and investment
income of the master trust investment accounts. The investments and activities of each master trust
investment account are specified; however, not all of the master trust investment accounts will
engage in all of the investments or activities described. In 2008 and 2007, the Plan, along with
the Intel Profit Sharing Plan, participated in the Stable Value Fund. Starting in 2008, the Plan,
along with the Intel Profit Sharing Plan and the Intel Pension Plan, participated in the U.S. Large
Cap Stock Fund, the International Stock Fund, the Global Bond Fund, and the U.S. Small Cap Stock
Fund. Also starting in 2008, the Plan, along with the Intel Profit Sharing Plan, participated in
the Alternative Investments Fund, which invests in marketable limited partnerships and
corporations, and non-marketable limited partnerships, through a LifeStage Fund.
7
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
The Plan, either directly or through investment in master trust investment accounts, holds
investments in registered mutual funds, common collective trust funds, equity securities, exchange
traded funds, fixed-income debt instruments, marketable limited partnerships or corporations,
non-marketable limited partnerships, and participant loans, all of which are stated at fair value
as of the last day of the plan year. The fair value for securities traded on a national securities
exchange or over-the-counter market is determined using the last reported sales price as of the
valuation date. Registered mutual funds are valued at quoted market prices that represent the net
asset values of shares held at year-end. Participation units in common collective trust funds are
stated at their unit price based on the fair values of underlying assets in the common collective
trust funds on the last business day of the plan year. Marketable limited partnerships and
corporations are valued at fair value based on available market quotations obtained from published
sources, independent pricing services or other market participants, and from financial information
received from the entities. Non-marketable limited partnerships are valued at fair value based on
available market quotations obtained from independent pricing services or other market
participants, and from financial information received from the general partner. Participant loans
are valued at fair value.
The Global Bond Fund may engage in repurchase agreement transactions. Under the terms of a
repurchase agreement, the Global Bond Fund takes possession of an underlying fixed-income debt
instrument (collateral) subject to an obligation of the seller to repurchase, and the Global Bond
Fund to resell, the fixed-income debt instrument at an agreed-upon price and date in the future.
Fixed-income debt instruments purchased under repurchase agreements are reflected as assets and the
obligations to resell as liabilities. The market value of the collateral must be equal to or exceed
the total amount of the repurchase obligations, including interest. Generally, in the event of
counterparty default, the Global Bond Fund has the right to use the collateral to offset losses
incurred.
The Global Bond Fund may purchase or sell securities on a delayed delivery or when-issued basis.
These transactions involve a commitment by the Global Bond Fund to purchase or sell securities for
a predetermined price or yield, with payment and delivery taking place beyond the customary
settlement period. When purchasing a security, the Global Bond Fund assumes the rights and risks of
ownership of the security, including the risk of price and yield fluctuations. The Global Bond Fund
may dispose of or renegotiate delivery of the security after entering into the transaction, and may
sell the security before it is delivered, which may result in a realized gain or loss. When the
Global Bond Fund has sold a security on a delayed delivery basis, the Global Bond Fund does not
participate in future gains and losses with respect to the security.
8
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
The Global Bond Fund may enter into short sales transactions. A short sale is a transaction in
which the Global Bond Fund sells securities it borrows in anticipation of a decline in the market
price of the securities, and a subsequent repurchase of the securities. Securities sold in short
sale transactions are reflected as a liability. The Global Bond Fund is obligated to deliver
securities at the market price at the date the short position is closed. Possible losses from short
sales may be unlimited, whereas losses from purchases cannot exceed the total amount invested.
Within the Stable Value Fund, traditional Guaranteed Investment Contracts (GICs) and Variable
Synthetic (VS) GICs are stated at fair value, computed using discounted cash flows. Wrapper
contracts related to Fixed Maturity Synthetic (FMS) GICs and Constant Duration Synthetic (CDS) GICs
also held in the Stable Value Fund are stated at fair value, based on a replacement cost determined
by Standish Mellon Asset Management (Standish), the Stable Value Fund’s investment manager. The
Stable Value Fund is allocated to the Plan and the Intel Profit Sharing Plan based on each plan’s
proportionate share of the underlying assets.
Investment contracts held by a defined contribution plan are reported at fair value. Contract value
is the relevant measurement attribute for that portion of the net assets available for benefits of
a defined contribution plan attributable to fully benefit-responsive investment contracts because
contract value is the amount participants would receive if they were to initiate permitted
transactions under the terms of the Plan. Contract value represents the cost plus contributions
made under the contracts plus interest at the contract rates less withdrawals and administrative
expenses. The statements of net assets available for benefits present the fair value of the
investment in the Stable Value Fund as well as the adjustment from fair value to contract value for
the Plan’s proportionate share of fully benefit-responsive investment contracts within the Stable
Value Fund. The statement of changes in net assets available for benefits is prepared on a contract
value basis.
Income Recognition
Net investment income includes the gain/(loss) realized on the sale of securities and unrealized
appreciation/(depreciation) in the fair value of investments. Unrealized
appreciation/(depreciation) is calculated as the difference between the fair value of investments
at the beginning and the end of the year for investments held the entire year, and the difference
between the purchase price and the fair value of investments at the end of the year for investments
acquired during the year.
9
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Investment transactions are recognized as of their trade dates. Interest is accrued daily;
dividends are accrued on the ex-dividend date.
Benefit Payments
Benefits are recorded when paid.
Contributions
Participant contributions are accrued when the participants’ salary deferrals are made.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and judgments that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ materially from
management’s estimates.
Reclassification
The Stable Value Fund in the statement of net assets available for benefits as of December 31, 2007
has been reclassified to value of interest in master trust investment accounts, at fair value to be
consistent with the current year presentation.
Accounting Changes
In 2008, the Plan adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements (SFAS No. 157), for all financial assets and financial liabilities recognized or
disclosed at fair value in the financial statements on a recurring basis (at least annually). SFAS
No. 157 defines fair value, establishes a framework for measuring fair value, and enhances fair
value measurement disclosure. The adoption of SFAS No. 157 did not have a significant impact on the
Plan’s financial statements, and the resulting fair values calculated under SFAS No. 157 after
adoption were not significantly different from the fair values that would have been calculated
under previous guidance. For further details on the Plan’s fair value measurements, see Note 4:
Fair Value.
10
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
In October 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP)
157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active
(FSP 157-3). FSP 157-3 clarifies the application of SFAS No. 157 in a market that is not active,
and addresses application issues such as the use of internal assumptions when relevant observable
data does not exist, the use of observable market information when the market is not active, and
the use of market quotes when assessing the relevance of observable and unobservable data. FSP
157-3 is effective for all periods presented in accordance with SFAS No. 157. The adoption of FSP
157-3 did not have a significant impact on the Plan’s financial statements or the fair values of
the Plan’s financial assets and liabilities.
Recent Accounting Pronouncements
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities—an amendment of FASB Statement No. 133 (SFAS No. 161). The standard requires additional
quantitative disclosures (provided in tabular form) and qualitative disclosures for derivative
instruments. The required disclosures include how derivative instruments and related hedged items
affect an entity’s financial position, financial performance, and cash flows; the relative volume
of derivative activity; the objectives and strategies for using derivative instruments; the
accounting treatment for those derivative instruments formally designated as the hedging instrument
in a hedge relationship; and the existence and nature of credit-risk-related contingent features
for derivatives. SFAS No. 161 does not change the accounting treatment for derivative instruments.
SFAS No. 161 is effective for the Plan beginning in 2009.
In April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That
Are Not Orderly (FSP 157-4). FSP 157-4 provides guidance on how to determine the fair value of
assets and liabilities when the volume and level of activity for the asset/liability has
significantly decreased. FSP 157-4 also provides guidance on identifying circumstances that
indicate a transaction is not orderly. In addition, FSP 157-4 requires disclosure of the inputs and
valuation techniques used to measure fair value and a discussion of changes in valuation
techniques. FSP 157-4 is effective for the Plan beginning in 2009. The adoption of FSP 157-4 is not
expected to have a significant impact on the Plan’s financial statements.
11
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
3. Master Trust Investment Accounts
A substantial majority of the Plan’s investments are included in “Investments, at fair value” in
the statements of net assets available for benefits. A smaller portion of the Plan’s investments
are in master trust investment accounts. In 2008, the Plan participated in the U.S. Large Cap Stock
Fund, the International Stock Fund, the Global Bond Fund, the U.S. Small Cap Stock Fund, the
Alternative Investments Fund and the Stable Value Fund. In 2007, the Plan only participated in the
Stable Value Fund.
The value of the Plan’s interest in the master trust investment accounts included in the statements
of net assets available for benefits represents the following percentages of the net assets
available for benefits of the asset class master trust investment accounts as of December 31, 2008:
| |
|
|
|
|
U.S. Large Cap Stock Fund |
|
|
15.3 |
% |
International Stock Fund |
|
|
8.5 |
% |
Global Bond Fund |
|
|
7.5 |
% |
U.S. Small Cap Stock Fund |
|
|
14.4 |
% |
Stable Value Fund |
|
|
80.5 |
% |
Alternative Investments Fund 1 |
|
|
0.0 |
% |
12
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
3. Master Trust Investment Accounts (continued)
The following table presents the net assets available for benefits of the six master trust
investment accounts at December 31, 2008:
| |
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|
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|
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|
|
|
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|
|
|
| |
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U.S. Large |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternative |
|
|
| |
|
Cap Stock |
|
International |
|
Global Bond |
|
U.S. Small Cap |
|
Stable Value |
|
Investments |
|
|
| |
|
Fund |
|
Stock Fund |
|
Fund |
|
Stock Fund |
|
Fund |
|
Fund |
|
Total |
| |
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
33,975,280 |
|
|
$ |
1,442,382 |
|
|
$ |
— |
|
|
$ |
17,500,000 |
|
|
$ |
52,917,662 |
|
Common collective trust funds |
|
|
1,461,369,070 |
|
|
|
979,906,271 |
|
|
|
35,631,845 |
|
|
|
9,534,097 |
|
|
|
108,418,033 |
|
|
|
1,009,762 |
|
|
|
2,595,869,078 |
|
Fixed-income debt instruments |
|
|
— |
|
|
|
— |
|
|
|
1,050,055,930 |
|
|
|
— |
|
|
|
63,061,401 |
|
|
|
— |
|
|
|
1,113,117,331 |
|
Exchange traded fund |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
198,239,914 |
|
|
|
— |
|
|
|
— |
|
|
|
198,239,914 |
|
Variable synthetic guaranteed
investment contracts |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,561,092 |
|
|
|
— |
|
|
|
2,561,092 |
|
Interest and dividends receivable |
|
|
— |
|
|
|
— |
|
|
|
12,755,395 |
|
|
|
122,301 |
|
|
|
253,780 |
|
|
|
813 |
|
|
|
13,132,289 |
|
Receivable from brokers for
securities sold |
|
|
— |
|
|
|
— |
|
|
|
1,774,653 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,774,653 |
|
Receivable for investments sold
on a delayed delivery basis |
|
|
— |
|
|
|
— |
|
|
|
158,342,564 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
158,342,564 |
|
Wrapper contracts |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
183,707 |
|
|
|
— |
|
|
|
183,707 |
|
Derivative assets |
|
|
— |
|
|
|
— |
|
|
|
26,601,040 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26,601,040 |
|
Marketable limited partnerships
and corporations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
185,174,113 |
|
|
|
185,174,113 |
|
Non-marketable limited
partnerships |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
40,282,019 |
|
|
|
40,282,019 |
|
Investment of securities lending
collateral |
|
|
— |
|
|
|
— |
|
|
|
311,980,940 |
|
|
|
197,442,891 |
|
|
|
— |
|
|
|
— |
|
|
|
509,423,831 |
|
| |
|
|
Total assets, at fair value |
|
|
1,461,369,070 |
|
|
|
979,906,271 |
|
|
|
1,631,117,647 |
|
|
|
406,781,585 |
|
|
|
174,478,013 |
|
|
|
243,966,707 |
|
|
|
4,897,619,293 |
|
| |
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued administrative fees |
|
|
173,558 |
|
|
|
214,295 |
|
|
|
569,925 |
|
|
|
87,256 |
|
|
|
99,187 |
|
|
|
782,500 |
|
|
|
1,926,721 |
|
Payable to brokers for securities
purchased |
|
|
— |
|
|
|
— |
|
|
|
2,737,172 |
|
|
|
1,440,963 |
|
|
|
— |
|
|
|
— |
|
|
|
4,178,135 |
|
Payable for investments sold
on a delayed delivery basis |
|
|
— |
|
|
|
— |
|
|
|
245,027,573 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
245,027,573 |
|
Payable to brokers for collateral
on deposit |
|
|
— |
|
|
|
— |
|
|
|
9,830,030 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,830,030 |
|
Derivative liabilities |
|
|
— |
|
|
|
— |
|
|
|
36,836,142 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
36,836,142 |
|
Securities sold, not yet purchased |
|
|
— |
|
|
|
— |
|
|
|
20,795,253 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,795,253 |
|
Payable for securities lending
collateral |
|
|
— |
|
|
|
— |
|
|
|
340,075,155 |
|
|
|
197,442,891 |
|
|
|
— |
|
|
|
— |
|
|
|
537,518,046 |
|
| |
|
|
Total liabilities, at fair value |
|
|
173,558 |
|
|
|
214,295 |
|
|
|
655,871,250 |
|
|
|
198,971,110 |
|
|
|
99,187 |
|
|
|
782,500 |
|
|
|
856,111,900 |
|
| |
|
|
Net assets available for benefits,
at fair value |
|
|
1,461,195,512 |
|
|
|
979,691,976 |
|
|
|
975,246,397 |
|
|
|
207,810,475 |
|
|
|
174,378,826 |
|
|
|
243,184,207 |
|
|
|
4,041,507,393 |
|
Adjustment from fair value to
contract value for fully benefit-
responsive investment
contracts held |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,206,017 |
|
|
|
— |
|
|
|
8,206,017 |
|
| |
|
|
Net assets available for benefits |
|
$ |
1,461,195,512 |
|
|
$ |
979,691,976 |
|
|
$ |
975,246,397 |
|
|
$ |
207,810,475 |
|
|
$ |
182,584,843 |
|
|
$ |
243,184,207 |
|
|
$ |
4,049,713,410 |
|
| |
|
|
The Alternative Investments Fund had future investment commitments in alternative investments of
$171,000,000 as of December 31, 2008.
13
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
3. Master Trust Investment Accounts (continued)
The value of the Plan’s interest in the Stable Value Fund included in the statement of net assets
available for benefits represented 81.0% of the net assets available for benefits of the Stable
Value Fund as of December 31, 2007.
The Stable Value Fund’s net assets available for benefits at December 31, 2007 consisted of the
following:
| |
|
|
|
|
Assets |
|
|
|
|
Investments, at fair value: |
|
|
|
|
Common collective trust funds |
|
$ |
88,664,602 |
|
Fixed-income debt instruments |
|
|
41,825,656 |
|
Traditional guaranteed investment contracts |
|
|
4,566,104 |
|
Variable synthetic guaranteed investment contracts |
|
|
2,548,880 |
|
Wrapper contracts |
|
|
10,345 |
|
|
|
|
|
Total investments, at fair value |
|
|
137,615,587 |
|
|
|
|
|
|
Interest and dividends receivable |
|
|
214,286 |
|
|
|
|
|
Total assets |
|
|
137,829,873 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Investment advisory fees |
|
|
64,515 |
|
|
|
|
|
Net assets available for benefits, at fair value |
|
|
137,765,358 |
|
|
|
|
|
|
Adjustment from fair value to contract value for fully
benefit-responsive investment contracts held |
|
|
767,032 |
|
|
|
|
|
Net assets available for benefits |
|
$ |
138,532,390 |
|
|
|
|
|
The following is a summary of the net investment income/(loss) in the master trust investment
accounts for the year ended December 31, 2008:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternative |
|
|
| |
|
U.S. Large Cap |
|
International |
|
Global Bond |
|
U.S. Small Cap |
|
Stable Value |
|
Investments |
|
|
| |
|
Stock Fund |
|
Stock Fund |
|
Fund |
|
Stock Fund |
|
Fund |
|
Fund |
|
Total |
| |
|
|
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments |
|
$ |
(880,935,174 |
) |
|
$ |
(787,815,273 |
) |
|
$ |
(124,375,877 |
) |
|
$ |
(103,213,174 |
) |
|
$ |
4,866,566 |
|
|
$ |
(39,779,196 |
) |
|
$ |
(1,931,252,128 |
) |
Interest and dividends |
|
|
631,646 |
|
|
|
544,611 |
|
|
|
53,408,762 |
|
|
|
6,490,501 |
|
|
|
2,352,087 |
|
|
|
63,677 |
|
|
|
63,491,284 |
|
Administrative fees |
|
|
(539,347 |
) |
|
|
(1,108,075 |
) |
|
|
(2,188,813 |
) |
|
|
(49,836 |
) |
|
|
(303,919 |
) |
|
|
(2,794,312 |
) |
|
|
(6,984,302 |
) |
| |
|
|
Net investment income/(loss) |
|
$ |
(880,842,875 |
) |
|
$ |
(788,378,737 |
) |
|
$ |
(73,155,928 |
) |
|
$ |
(96,772,509 |
) |
|
$ |
6,914,734 |
|
|
$ |
(42,509,831 |
) |
|
$ |
(1,874,745,146 |
) |
| |
|
|
14
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
4. Fair Value
The Plan’s financial instruments and the master trust investment accounts are stated at fair value.
SFAS No. 157 defines fair value as the price that would be received from selling an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement
date. When determining fair value, the Plan considers the principal or most advantageous market in
which the Plan would transact, and the Plan considers assumptions that market participants would
use when pricing the asset or liability, such as inherent risk, transfer restrictions, redemption
restrictions, and risk of non-performance.
The Plan’s financial instruments stated at fair value are detailed in the tables below, and the
fair value of the Plan’s master trust investment accounts within the Master Trust are separately
disclosed below the Plan’s investments.
Fair Value Hierarchy
SFAS No. 157 establishes three levels of inputs that may be used to measure fair value:
Level 1. Quoted prices in active markets for identical assets or liabilities.
Level 1 assets and liabilities consist of certain of the Plan’s cash deposits and marketable
fixed-income debt and equity instruments, registered mutual funds, bonds held in the FMS GICs, and
exchange traded funds that are traded in an active market with sufficient volume and frequency of
transactions.
Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or
liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less
active markets), or model-derived valuations in which all significant inputs are observable or can
be derived principally from or corroborated with observable market data for substantially the full
term of the assets or liabilities.
Level 2 assets consist of certain of the Plan’s marketable fixed-income debt instruments with
quoted market prices that are traded in less active markets or priced using a quoted market price
for similar instruments. Level 2 assets also include marketable fixed-income debt instruments
priced using non-binding market consensus prices that can be corroborated with observable market
data, as well as fixed-income debt instruments and derivative contracts priced using inputs that
are observable in the market or can be
derived principally from or corroborated with observable market data. Other marketable instruments
in this category generally include certain of the Plan’s common collective trust funds, registered
mutual funds, certain marketable limited partnerships or corporations, GICs, CDS GICs, and VS GICs.
15
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
4. Fair Value (continued)
Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement
of the fair value of assets or liabilities.
Level 3 assets and liabilities include certain of the Plan’s marketable limited partnerships or
corporations, non-marketable limited partnership investments, wrapper contracts for both the FMS
GICs and CDS GICs, participant loans, and fixed-income debt instruments whose values are determined
using inputs that are both unobservable and significant to the values of the instruments being
measured.
Assets Measured at Fair Value on a Recurring Basis
The Plan’s assets measured at fair value on a recurring basis, excluding accrued interest and
administrative fees, consisted of the following types of instruments as of December 31, 2008:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Fair Value Measurements at Reporting Date Using |
|
|
|
|
| |
|
Quoted Prices in |
|
|
|
|
|
|
|
|
|
|
| |
|
Active Markets for |
|
|
Significant |
|
|
Significant |
|
|
|
|
| |
|
Identical |
|
|
Other Observable |
|
|
Unobservable |
|
|
|
|
| |
|
Instruments |
|
|
Inputs |
|
|
Inputs |
|
|
|
|
| |
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
Total |
|
| |
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common collective trust funds |
|
$ |
— |
|
|
$ |
104,263,403 |
|
|
$ |
— |
|
|
$ |
104,263,403 |
|
Common stock |
|
|
257,883,169 |
|
|
|
— |
|
|
|
— |
|
|
|
257,883,169 |
|
Registered mutual funds |
|
|
1,914,326,899 |
|
|
|
63,191,195 |
|
|
|
— |
|
|
|
1,977,518,094 |
|
Participant loans |
|
|
— |
|
|
|
— |
|
|
|
54,498,071 |
|
|
|
54,498,071 |
|
| |
|
|
Total assets measured at fair
value 1 |
|
$ |
2,172,210,068 |
|
|
$ |
167,454,598 |
|
|
$ |
54,498,071 |
|
|
$ |
2,394,162,737 |
|
| |
|
|
|
|
|
| 1 |
|
For further fair value information on the assets held in the master trust investment
accounts see master trust investment accounts fair value disclosure below. |
16
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
4. Fair Value (continued)
The table below presents a reconciliation for the Plan’s assets and liabilities measured at fair
value on a recurring basis, excluding accrued interest and administrative fees, using significant
unobservable inputs (Level 3) for 2008:
| |
|
|
|
|
| |
|
Fair Value |
|
| |
|
Measurements |
|
| |
|
Using Significant |
|
| |
|
Unobservable |
|
| |
|
Inputs (Level 3) |
|
| |
|
Participant Loans |
|
Balance as of December 31, 2007 |
|
$ |
50,749,133 |
|
Total gains/(losses) (realized and unrealized) |
|
|
— |
|
Purchases, sales, issuances, and settlements, net |
|
|
3,748,938 |
|
Transfers in (out) of Level 3 |
|
|
— |
|
|
|
|
|
Balance as of December 31, 2008 |
|
$ |
54,498,071 |
|
|
|
|
|
The Plan did not have any financial liabilities as of December 31, 2008. The Plan did not have any
assets or liabilities that are measured at fair value on a non-recurring basis as of December 31,
2008.
17
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
4. Fair Value (continued)
The master trust investment accounts’ assets and liabilities measured at fair value on a recurring
basis, excluding accrued interest and administrative fees, in accordance with SFAS No. 157
consisted of the following types of instruments as of December 31, 2008 for the six asset class
master trust investment accounts:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Fair Value Measurements at Reporting Date Using |
|
|
|
|
| |
|
Quoted Prices in |
|
|
|
|
|
|
|
|
|
|
| |
|
Active Markets |
|
|
Significant Other |
|
|
Significant |
|
|
|
|
| |
|
for Identical |
|
|
Observable |
|
|
Unobservable |
|
|
|
|
| |
|
Instruments |
|
|
Inputs |
|
|
Inputs |
|
|
|
|
| |
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
Total |
|
| |
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
52,917,662 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
52,917,662 |
|
Common collective trust funds |
|
|
— |
|
|
|
2,595,869,078 |
|
|
|
— |
|
|
|
2,595,869,078 |
|
Fixed-income debt instruments |
|
|
300,209,381 |
|
|
|
809,148,743 |
|
|
|
3,759,207 |
|
|
|
1,113,117,331 |
|
Exchange traded fund |
|
|
198,239,914 |
|
|
|
— |
|
|
|
— |
|
|
|
198,239,914 |
|
Variable synthetic guaranteed
investment contracts |
|
|
— |
|
|
|
2,561,092 |
|
|
|
— |
|
|
|
2,561,092 |
|
Receivable from brokers for securities
sold |
|
|
1,774,653 |
|
|
|
— |
|
|
|
— |
|
|
|
1,774,653 |
|
Receivable for investments sold on a
delayed delivery basis |
|
|
158,342,564 |
|
|
|
— |
|
|
|
— |
|
|
|
158,342,564 |
|
Wrapper contracts |
|
|
— |
|
|
|
— |
|
|
|
183,707 |
|
|
|
183,707 |
|
Derivative assets |
|
|
1,713,330 |
|
|
|
24,887,710 |
|
|
|
— |
|
|
|
26,601,040 |
|
Marketable limited partnerships or
corporations |
|
|
— |
|
|
|
151,516,830 |
|
|
|
33,657,283 |
|
|
|
185,174,113 |
|
Non-marketable limited partnerships |
|
|
— |
|
|
|
— |
|
|
|
40,282,019 |
|
|
|
40,282,019 |
|
Investments of securities lending
collateral |
|
|
— |
|
|
|
509,423,831 |
|
|
|
— |
|
|
|
509,423,831 |
|
| |
|
|
Total assets measured at fair value |
|
$ |
713,197,504 |
|
|
$ |
4,093,407,284 |
|
|
$ |
77,882,216 |
|
|
$ |
4,884,487,004 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable to brokers for securities
purchased |
|
$ |
4,178,135 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,178,135 |
|
Payable for investments purchased on a
delayed delivery basis |
|
|
245,027,573 |
|
|
|
— |
|
|
|
— |
|
|
|
245,027,573 |
|
Payable to brokers for collateral on
deposit |
|
|
9,830,030 |
|
|
|
— |
|
|
|
— |
|
|
|
9,830,030 |
|
Derivative liabilities |
|
|
— |
|
|
|
36,836,142 |
|
|
|
— |
|
|
|
36,836,142 |
|
Securities sold, not yet purchased |
|
|
— |
|
|
|
20,795,253 |
|
|
|
— |
|
|
|
20,795,253 |
|
Payable for securities lending
collateral |
|
|
537,518,046 |
|
|
|
— |
|
|
|
— |
|
|
|
537,518,046 |
|
| |
|
|
Total liabilities measured at fair value |
|
$ |
796,553,784 |
|
|
$ |
57,631,395 |
|
|
$ |
— |
|
|
$ |
854,185,179 |
|
| |
|
|
18
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
4. Fair Value (continued)
The table below provides a summary of each of the master trust investment accounts by the fair
value inputs used in the measurement as of December 31, 2008.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternative |
|
|
| |
|
U.S. Large Cap |
|
International |
|
Global Bond |
|
U.S. Small Cap |
|
Stable Value |
|
Investments |
|
|
| |
|
Stock Fund |
|
Stock Fund |
|
Fund |
|
Stock Fund |
|
Fund |
|
Fund |
|
Total |
| |
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
496,015,208 |
|
|
$ |
199,682,296 |
|
|
$ |
— |
|
|
$ |
17,500,000 |
|
|
$ |
713,197,504 |
|
Level 2 |
|
|
1,461,369,070 |
|
|
|
979,906,271 |
|
|
|
1,118,587,837 |
|
|
|
206,976,988 |
|
|
|
174,040,526 |
|
|
|
152,526,592 |
|
|
|
4,093,407,284 |
|
Level 3 |
|
|
— |
|
|
|
— |
|
|
|
3,759,207 |
|
|
|
— |
|
|
|
183,707 |
|
|
|
73,939,302 |
|
|
|
77,882,216 |
|
| |
|
|
Total assets
measured at fair
value |
|
$ |
1,461,369,070 |
|
|
$ |
979,906,271 |
|
|
$ |
1,618,362,252 |
|
|
$ |
406,659,284 |
|
|
$ |
174,224,233 |
|
|
$ |
243,965,894 |
|
|
$ |
4,884,487,004 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
597,669,930 |
|
|
$ |
198,883,854 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
796,553,784 |
|
Level 2 |
|
|
— |
|
|
|
— |
|
|
|
57,631,395 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
57,631,395 |
|
| |
|
|
Total liabilities
measured at fair
value |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
655,301,325 |
|
|
$ |
198,883,854 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
854,185,179 |
|
| |
|
|
The table below presents a reconciliation for the master trust investment accounts’ assets and
liabilities measured at fair value on a recurring basis, excluding accrued interest and
administrative fees, using significant unobservable inputs (Level 3) for 2008:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Fair Value Measurements Using Significant Unobservable Inputs |
|
|
| |
|
(Level 3) |
|
|
| |
|
|
|
|
|
|
|
|
|
Marketable |
|
|
|
|
| |
|
Fixed-Income |
|
|
|
|
|
Limited |
|
Non-Marketable |
|
|
| |
|
Debt |
|
Wrapper |
|
Partnerships or |
|
Limited |
|
Total Gains/ |
| |
|
Instruments |
|
Contract |
|
Corporations |
|
Partnerships |
|
(Losses) |
| |
|
|
Balance as of December 31, 2007
|
|
$ |
2,446,659 |
|
|
$ |
10,345 |
|
|
$ |
21,343,737 |
|
|
$ |
26,471,397 |
|
|
$ |
50,272,138 |
|
Total gains/(losses) (realized and unrealized)
|
|
|
(2,193,675 |
) |
|
|
173,362 |
|
|
|
(12,323,952 |
) |
|
|
(9,862,007 |
) |
|
|
(24,206,272 |
) |
Purchases, sales, issuances, and settlements, net
|
|
|
3,506,223 |
|
|
|
— |
|
|
|
24,637,498 |
|
|
|
23,672,629 |
|
|
|
51,816,350 |
|
Transfers in (out) of Level 3
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| |
|
|
Balance as of December 31, 2008
|
|
$ |
3,759,207 |
|
|
$ |
183,707 |
|
|
$ |
33,657,283 |
|
|
$ |
40,282,019 |
|
|
$ |
77,882,216 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The amount of total gains/(losses) for the period
included in changes in net assets attributable to
the changes in unrealized gains/(losses) related to
assets and liabilities still held as of
December 31, 2008
|
|
$ |
(2,193,675 |
) |
|
$ |
173,362 |
|
|
$ |
(12,323,952 |
) |
|
$ |
(9,862,007 |
) |
|
$ |
(24,206,272 |
) |
19
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
4. Fair Value (continued)
Changes in net assets are included in the master trust investment accounts net increase/(decrease)
for the year ended December 31, 2008 and are disclosed in net investment income/(loss) as follows:
| |
|
|
|
|
| |
|
Level 3 |
| |
|
Net Investment |
| |
|
Income/(Loss) |
Total gains/(losses) included in net change in assets |
|
$ |
(24,206,272 |
) |
Change in unrealized gains/(losses) related to assets and
liabilities still held as of December 31, 2008 |
|
|
(24,206,272 |
) |
The master trust investment accounts did not have any assets or liabilities that are measured at
fair value on a non-recurring basis as of December 31, 2008.
5. Investments
The fair value of individual investments that represent 5% or more of the fair value of the Plan’s
net assets available for benefits at year-end are as follows:
| |
|
|
|
|
|
|
|
|
| |
|
December 31, |
| |
|
2008 |
|
2007 |
| |
|
|
Mutual funds: |
|
|
|
|
|
|
|
|
American Funds EuroPacific Growth Fund |
|
$ |
148,626,143 |
|
|
$ |
273,134,153 |
|
Fidelity Contrafund |
|
|
187,521,542 |
|
|
|
307,508,515 |
|
Fidelity Low-Priced Stock Fund |
|
|
167,803,318 |
|
|
|
295,440,026 |
|
Fidelity U.S. Treasury Money Market 1 |
|
|
156,231,113 |
|
|
|
— |
|
Vanguard Institutional Index Fund |
|
|
163,155,571 |
|
|
|
270,210,560 |
|
Common stock: |
|
|
|
|
|
|
|
|
Intel Corporation |
|
|
257,883,169 |
|
|
|
487,531,923 |
|
|
|
|
| 1 |
|
This fund was not an investment option in the Plan as of December 31, 2007. |
20
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
5. Investments (continued)
During 2008, the Plan’s investments (including investments purchased, sold, and held during the
year) declined in fair value as follows:
| |
|
|
|
|
| |
|
Year Ended |
|
| |
|
December 31, |
|
| |
|
2008 |
|
Net realized and unrealized (depreciation) in fair
value of investments: |
|
|
|
|
Registered mutual funds |
|
$ |
(1,108,416,194 |
) |
Common collective trust funds |
|
|
(132,613,922 |
) |
Intel common stock |
|
|
(213,063,158 |
) |
Other common stock |
|
|
(1,445,123 |
) |
|
|
|
|
Net realized and unrealized (depreciation) in fair
value of investments |
|
$ |
(1,455,538,397 |
) |
|
|
|
|
6. Investment Contracts
The Stable Value Fund holds investment contracts with insurance companies and banks in order to
provide participants with a stable, fixed-rate return on investment and protection of principal
from changes in market interest rates. Standish has discretionary authority for the purchase and
sale of investments in the Stable Value Fund, subject to the general investment policies of the
Investment Policy Committee.
The Traditional GICs crediting rate is based upon the rate that is agreed to when the insurance
company writes the contract and is generally fixed for the life of the contract. The initial
crediting rate for both the CDS GICs and the FMS GICs is set based on the market interest rates at
the time that the initial asset is purchased and is guaranteed to have an interest crediting rate
not less than zero percent. The CDS GICs crediting rate and the FMS GICs crediting rate reset every
quarter based on the book value of the contract, the market value of the underlying assets, and the
average duration of the underlying assets. The crediting rate for CDS GICs aims at converging the
book value of the contract and the market value of the contract and therefore will be affected by
interest rate and market changes. The VS GICs crediting rate is reset every quarter based on the
then current market index rates and investment spread. The investment spread is established when
the contract is issued and is guaranteed by the issuer for the life of the investment.
21
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
6. Investment Contracts (continued)
Certain events may limit the ability of the Stable Value Fund to transact at contract value with
the issuers. Such events include the following:
| |
• |
|
default of wrap provider; |
| |
| |
• |
|
default of an underlying bond issuer with material impact on the fund; |
| |
| |
• |
|
employer initiated events that are within the control of the plan sponsor that would
have a material and adverse impact on the fund; |
| |
| |
• |
|
employer communications designed to induce participants to transfer from the fund; |
| |
| |
• |
|
competing fund transfer or violation of equity wash or equivalent rules in place; and |
| |
| |
• |
|
changes in qualification status of the employer or the plans participating in the fund. |
If any such event occurs, market value would likely be used in determining the payouts to the
participants.
In general, issuers may terminate the contract and settle at other than contract value if there is
a change in the qualification status of the employer or the Plan, if there is a breach of material
obligations under the contract and misrepresentations by the contract holder, if the market and
book values diverge dramatically, or if there is a failure of the underlying portfolio to conform
to the pre-established investment guidelines.
The FMS GICs and CDS GICs use wrapper contracts in order to manage market risks and to alter the
return characteristics of the underlying portfolio of securities owned by the Stable Value Fund to
match certain fixed income fund objectives. Wrapper contracts generally change the investment
characteristics of underlying securities (such as corporate debt or U.S. government securities) to
those of traditional GICs. The wrapper contracts provide that benefit-responsive distributions for
specific underlying securities may be withdrawn at contract or face value. Benefit-responsive
distributions are generally defined as a withdrawal on account of a participant’s retirement,
disability, or death, or participant-directed transfers in accordance with the terms of the Plan.
22
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
6. Investment Contracts
The investment contracts owned by the Stable Value Fund earned the following average yields:
| |
|
|
|
|
|
|
|
|
| |
|
Years Ended
December 31, |
| |
|
2008 |
|
2007 |
| |
|
|
Earned by the Plan |
|
|
4.47 |
% |
|
|
4.72 |
% |
Credited to participants |
|
|
4.34 |
% |
|
|
4.61 |
% |
7. Party-In-Interest Transactions
Approximately 9% of the Plan’s net assets available for benefits are shares of the company’s common
stock. Transactions in shares of the company’s common stock qualify as party-in-interest
transactions under the provisions of ERISA. During 2008, the Plan made purchases of the company’s
common stock of $18,464,862 and sales and distributions of $35,050,458.
As a result of the turmoil in the financial markets, the net asset value of the Reserve Primary
Institutional Fund, a money market registered mutual fund, dropped below $1.00 per share. The
Reserve Primary Institutional Fund did not meet redemption requests and received approval from the
Securities and Exchange Commission to temporarily suspend payments to investors. The fund has since
proceeded with a complete liquidation. The company decided to guarantee at least 75% of every
participant’s investment in this fund. To accomplish this, the company made a loan to the Plan in
the amount of $118,183,075, which was 75% of the amount participants had invested in the Reserve
Primary Institutional Fund as of September 15, 2008. The loan was unsecured with interest free
repayments to be paid solely from future distributions from Reserve Primary Institutional Fund. The
loan proceeds were used to transfer 75% of each participant’s investment in the Reserve Primary
Institutional Fund to the Fidelity U.S. Treasury Money Market Fund. The distributions from the
Reserve Primary Institutional Fund were sufficient to completely repay the loan before the end of
2008. In addition, the company agreed that if the per share price it receives for company-owned
shares of the Reserve Primary Institutional Fund in the liquidation exceeds the per share price
received by the Plan for its shares, it will make a payment to the Plan equal to the difference.
23
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
7. Party-In-Interest Transactions (continued)
The net asset value of the Mellon Trust of New England, N.A. Pooled Employee Daily Liquidity Fund
(Liquidity Fund), a short term investment vehicle which the Plan, the Intel Profit Sharing Plan,
the Intel Pension Plan, and the master trust investment accounts utilize to hold operating cash,
fell below $1.00 per unit in September 2008 due to the Liquidity Fund’s exposure to Lehman Brothers
Holdings Inc. (Lehman). Mellon, a related party to the Plan, reimbursed the Liquidity Fund for its
losses due to the Lehman bankruptcy. The portion of the amount Mellon reimbursed the Liquidity Fund
attributed to the Plan, the Intel Profit Sharing Plan, the Intel Pension Plan, and the master trust
investment accounts was $381,181.
8. Derivative Financial Instruments
The Plan, either directly or through the master trust investment accounts, invests in common
collective trust funds, marketable limited partnerships or corporations, and non-marketable limited
partnerships, which can purchase derivatives consistent with their offering documents and
prospectuses. The Plan does not directly hold any derivatives that are designated as hedging
instruments.
During 2008, the Plan added the Global Bond Fund which consists of separately managed accounts. The
investment managers of these accounts may use derivatives, consistent with the objective of the
account, to hedge a portion of the investments to limit or minimize exposure to certain risks and
to gain access to markets more efficiently. The investment managers do not employ leverage in the
use of derivatives. Following is a summary of the significant accounting policies associated with
the use of derivatives by the Global Bond Fund.
Forward Foreign Currency Exchange Contracts
The Global Bond Fund has investments that are denominated in foreign currencies and utilizes
forward foreign currency contracts to hedge a portion of the currency exposure for these
investments. Forward foreign currency contracts are generally marked-to-market at the prevailing
forward exchange rate of the underlying currencies, and the difference between contract value and
market value is recorded as unrealized appreciation/(depreciation). When the forward foreign
currency contract is closed, the Global Bond Fund transfers the unrealized
appreciation/(depreciation) to a realized gain/(loss) equal to the change in the value of the
forward exchange contract when it was
opened and the value at the time it was closed. Sales and purchases of forward foreign currency
contracts having the same settlement date and broker are offset, and any gain/(loss) is realized on
that date. At the end of the year, open forward foreign currency contracts are recorded as a
derivative asset if the market value of the contract has appreciated or as a derivative liability
if depreciated.
24
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
8. Derivative Financial Instruments (continued)
Certain risks may arise upon entering into a forward foreign currency contract from the potential
inability of counterparties to meet the terms of their contracts. The Global Bond Fund seeks to
control this risk by evaluating the creditworthiness of potential counterparties and establishing
credit limits. Additionally, when utilizing forward foreign currency contracts, the Global Bond
Fund gives up the opportunity to profit from favorable exchange rate movements during the term of
the contract.
A substantial majority of the forward foreign currency contracts are denominated in Australian
dollars, British pounds, euros, and Japanese yen. The following is a summary of the open forward
foreign currency exchange contracts in the Global Bond Fund as of December 31, 2008:
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Unrealized |
|
| |
|
|
|
|
|
|
|
|
|
Appreciation/ |
|
| |
|
Cost |
|
|
Fair Value |
|
|
(Depreciation) |
|
| |
|
|
Currency purchased |
|
$ |
259,529,469 |
|
|
$ |
264,296,455 |
|
|
$ |
4,766,986 |
|
Currency sold |
|
|
259,529,469 |
|
|
|
261,411,438 |
|
|
|
(1,881,969 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized
appreciation |
|
|
|
|
|
|
|
|
|
$ |
2,885,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
A futures contract is a contractual agreement to deliver or receive a commodity or financial
instrument at a specific date in the future at an agreed upon price. The Global Bond Fund uses
fixed-income futures contracts to manage exposure to the market. Buying futures typically increases
the Global Bond Fund’s exposure to the underlying instrument. Selling futures typically decreases
the Global Bond Fund’s exposure to the underlying instrument held, or hedges the fair value of the
other investments.
25
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
8. Derivative Financial Instruments (continued)
Futures contracts are valued at the last settlement price at the end of each day on the exchange
upon which they are traded. Upon entering into a futures contract, the Global Bond Fund is required
to deposit either in cash or securities an amount (“initial margin”) equal to a certain percentage
of the nominal value of the contract. Pursuant to the futures contract, the Global Bond Fund agrees
to receive from, or to pay to, the broker an amount of cash equal to the daily fluctuation in the
value of the futures contract. Such receipts or payments, known as “variation margin,” are
generally settled daily and are included in the unrealized appreciation/(depreciation) on futures
contracts. Each separately managed account maintains its own variation margin accounts, and there
is a separate variation margin account for each exchange used in the separately managed account. At
the end of the year, the net amount of the variation margin accounts is recorded as a derivative
asset if it has a positive balance or as a derivative liability if it has a negative balance. The
net value of the variation margin accounts was $142,229 as of December 31, 2008.
Futures contracts involve, to varying degrees, credit and market risks. The Global Bond Fund enters
into exchange traded futures contracts where the broker acts as the clearinghouse for and
counterparty to the transactions. Thus, credit risk on such transactions is mitigated by having an
exchange that regulates margin requirements for futures contracts and capital requirements for
clearinghouses, and by the ability of clearinghouses to net customer trades. The daily settlement
process on the futures contracts serves to greatly reduce credit risk. Losses in value may arise
from changes in the value of the underlying instruments or if there is an illiquid secondary market
for the contracts. In addition, there is the risk that there may not be an exact correlation
between a futures contract and the underlying index or security.
In 2008, most of the futures contracts were interest rate futures, Eurodollar futures, and U.S.
Treasury note and bond futures. The following is a summary of the open futures contracts in the
Global Bond Fund as of December 31, 2008:
| |
|
|
|
|
|
|
|
|
| |
|
Long |
|
Short |
| |
|
|
Notional value of contracts |
|
$ |
65,014,536 |
|
|
$ |
49,671,502 |
|
The Global Bond Fund had assets pledged as collateral for futures contracts with a fair value of
$3,500,564 as of December 31, 2008.
26
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
8. Derivative Financial Instruments (continued)
Swap Agreements
The Global Bond Fund enters into swap agreements to exchange or swap investment cash flows, assets,
or market-linked returns at specified future intervals with counterparties. The Global Bond Fund
has entered into interest rate and credit default swap agreements to manage its exposure to
interest rates and credit risk. In connection with these agreements, securities may be identified
as collateral in accordance with the terms of the respective swap agreements.
Swaps are marked-to-market daily based on quotations supplied by an exchange, a pricing service, or
a major market maker (or dealer), and the change in value, if any, is recorded as unrealized
appreciation/(depreciation). Realized gain/(loss) is recorded upon termination or maturity of the
swap. At the end of the year, outstanding swaps with a positive fair value are recorded as a
derivative asset, and those with a negative fair value are recorded as a derivative liability.
Entering into these agreements involves, to varying degrees, elements of credit and market risk in
excess of the amounts recognized in the statements of net assets available for benefits. Such risks
involve the possibility that there will be no liquid market for these agreements, that the
counterparty to the agreements may default on its obligation to perform or disagree as to the
meaning of contractual terms in the agreements, and that there may be unfavorable changes in
interest rates.
The notional and fair values of the swaps outstanding as of December 31, 2008 in the Global Bond
Fund were as follows:
| |
|
|
|
|
|
|
|
|
| |
|
Notional Value |
|
Fair Value |
| |
|
|
Interest rate swaps |
|
$ |
294,816,400 |
|
|
$ |
(15,868,660 |
) |
Credit default swaps |
|
|
107,785,711 |
|
|
|
1,035,212 |
|
Effective December 31, 2008, the Plan adopted FSP FAS No. 133-1 and FIN No. 45-4, Disclosures about
Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB
Interpretation No. 45 (FSP FAS 133-1/FIN 45-4). The adoption of FSP FAS 133-1/FIN 45-4 enhances
disclosure requirements for sellers of credit derivatives and did not have any impact to the
accounting treatment of credit derivatives.
27
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
8. Derivative Financial Instruments (continued)
As of December 31, 2008, the Global Bond Fund had entered into various derivative transactions that
are considered credit derivatives under FSP FAS 133-1/FIN 45-4. The Global Bond Fund writes and
purchases credit default swaps primarily through credit default swap indices, but may also do so on
a single name or basket basis. The use of credit default swaps in the Global Bond Fund provides the
Global Bond Fund with flexibility in adjusting the yield curve and credit characteristic of the
portfolio. Credit default swaps can provide access to exposure that may not be available in the
financial markets.
The following table contains the notional value of the Global Bond Fund’s written credit
derivatives as of December 31, 2008:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Notional Value of Credit Default Swaps |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Written |
| Credit Spread on |
|
|
|
|
|
|
|
|
|
10 years or |
|
Credit |
| underlying (Basis Points)1 |
|
0-5 years |
|
5-10 years |
|
greater |
|
Derivatives2 |
| |
Less than 1,000 |
|
$ |
1,800,000 |
|
|
$ |
292,800 |
|
|
$ |
— |
|
|
$ |
2,092,800 |
|
Between 1,000 and 2,000 |
|
|
— |
|
|
|
1,000,000 |
|
|
|
2,777,711 |
|
|
|
3,777,711 |
|
Greater than 2,000 |
|
|
— |
|
|
|
— |
|
|
|
4,800,000 |
|
|
|
4,800,000 |
|
| |
|
|
Total |
|
$ |
1,800,000 |
|
|
$ |
1,292,800 |
|
|
$ |
7,577,711 |
|
|
$ |
10,670,511 |
|
| |
|
|
|
|
|
| 1 |
|
Credit spread on the underlying, together with the period of expiration are indicators of
payment/performance risk. The likelihood of payment or performance is greater as credit spread on the underlying
and period of expiration increase. |
| |
| 2 |
|
All credit default swaps written are investment grade quality. |
The maximum payouts for contracts are limited to the notional values of each derivative contract.
As of December 31, 2008, the Global Bond Fund’s written credit derivatives had a notional contract
value of $10,670,511. The fair value of the Global Bond Fund’s credit derivatives sold was
$(4,657,976) as of December 31, 2008 and was included as a derivative liability on the statement of
net assets available for benefits.
Typical credit events include bankruptcy, failure to pay, debt restructuring, obligation default,
and repudiation. The settlement terms of credit default swaps are determined when the credit
default swap contract is written.
The Global Bond Fund had assets pledged as collateral for swap agreements with a fair value of
$8,391,959 as of December 31, 2008.
28
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
8. Derivative Financial Instruments (continued)
Options Contracts
The Global Bond Fund writes call and put options on futures, swaps, securities, or currencies it
owns or in which it may invest. Writing put options increases the Global Bond Fund’s exposure to
the underlying instrument. Writing call options decreases the Global Bond Fund’s exposure to the
underlying instrument. When the Global Bond Fund writes a call or put option, an amount equal to
the premium received is recorded as a liability and subsequently marked-to-market to reflect the
current value of the option written. These liabilities are reflected as derivative liabilities in
the statements of net assets available for benefits. Premiums received from writing options which
expire out of the money are treated as realized gains. Premiums received from writing options which
are exercised or closed are added to the proceeds or offset against amounts paid on the underlying
future, swap, security, or currency transaction to determine the realized gain or loss. As a writer
of an option, the Global Bond Fund has no control over whether the underlying future, swap,
security, or currency may be sold (call) or purchased (put) and as a result bears the market risk
of an unfavorable change in the price of the future, swap, security, or currency underlying the
written option. There is a risk that the Global Bond Fund may not be able to enter into a closing
transaction because of an illiquid market.
The Global Bond Fund also purchases put and call options. Purchasing call options increases the
Global Bond Fund’s exposure to the underlying instrument. Purchasing put options decreases the
Global Bond Fund’s exposure to the underlying instrument. The Global Bond Fund pays a premium which
is included in the Global Bond Fund’s statement of net assets available for benefits as an
investment and subsequently marked-to-market to reflect the current value of the options. Premiums
paid for purchasing options which expire out of the money are treated as realized losses. The risk
associated with purchasing put and call options is limited to the premium paid. Premiums paid for
purchasing options which are exercised or closed are added to the amounts paid or offset against
the proceeds on the underlying future, swap, security, or currency transaction to determine the
realized gain or loss.
At the end of the year, the total fair value of the open options is recorded as a derivative asset
if the fair value is positive, or as a derivative liability if the fair value is negative.
29
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
8. Derivative Financial Instruments (continued)
A substantial majority of the options are for Eurodollar futures and bond futures. The following is
a summary of options outstanding in the Global Bond Fund as of December 31, 2008:
| |
|
|
|
|
| |
|
Fair Value |
|
Call options purchased |
|
$ |
1,568,879 |
|
Put options purchased |
|
|
2,221 |
|
|
|
|
|
Total fair value |
|
$ |
1,571,100 |
|
|
|
|
|
9. Securities Lending
The Master Trust has securities lending agreements with Mellon relating to the assets in the Global
Bond Fund and the Plan, and a securities lending agreement with Barclays Global Investors (BGI)
relating to the assets in the U.S. Small Cap Stock Fund. The Plan did not have any investments in
the Global Bond Fund or the U.S. Small Cap Stock Fund during 2007. The Plan and master trust
investment accounts are not restricted from lending securities to other qualified financial
institutions, provided such loans are callable at any time and are at all times fully secured by
cash, cash equivalents, or securities issued or guaranteed by the U.S. government or its agencies.
The Plan and master trust investment accounts may bear the risk of delay in recovery of, or even of
rights in, the securities loaned if the borrower of the securities fails financially. Consequently,
loans of securities are only made to firms deemed to be creditworthy. The Plan and master trust
investment accounts are also subject to investment risk in connection with investment of the
collateral. The Plan and master trust investment accounts receive compensation for lending their
securities, either in the form of fees or by retaining a portion of the return on the investment of
any cash received as collateral.
Cash collateral is recorded as an asset with a corresponding liability on the statements of net
assets available for benefits. For lending agreements collateralized by securities, the collateral
is not recorded as an asset or a liability, unless the collateral is repledged. All collateral
received will be in an amount equal to at least 102% of the fair value of the U.S. loaned
securities and 105% of the fair value of foreign securities. It is intended that the collateral
will be maintained at that level during the period of the loan. The fair value of the loaned
securities is determined at the close of business, and any additional required collateral is
delivered the next business day.
30
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
9. Securities Lending (continued)
The Plan did not have any loaned securities at December 31, 2008 as the Plan, individually, no
longer holds securities eligible for lending. At December 31, 2007, the Plan held collateral valued
at $3,781,817, including $36,321 collateralized by securities which the Plan does not have the
right to sell or repledge. The fair value of the loaned securities was $3,639,760 at December 31,
2007. During the loan period, the Plan continues to retain rights of ownership, including dividends
and interest of the loaned securities. Income generated from securities lending arrangements
totaled $9,242 for the year ended December 31, 2008, and $2,405 for the year ended December 31,
2007. These amounts were included in the Plan’s net realized and unrealized
appreciation/(depreciation) in fair value of investments on the statement of changes in net assets
available for benefits.
The following is a summary of the collateral held and the fair value of securities on loan for the
master trust investment accounts as December 31, 2008:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Securities |
|
|
|
|
|
Fair Value of |
| |
|
Cash |
|
Held as |
|
Total |
|
Loaned |
| |
|
Collateral |
|
Collateral |
|
Collateral |
|
Securities |
| |
|
|
Global Bond Fund |
|
$ |
311,980,940 |
|
|
$ |
5,296,414 |
|
|
$ |
317,277,354 |
|
|
$ |
338,962,494 |
|
U.S. Small Cap Stock Fund |
|
|
197,442,891 |
|
|
|
— |
|
|
|
197,442,891 |
|
|
|
192,332,691 |
|
| |
|
|
Total |
|
$ |
509,423,831 |
|
|
$ |
5,296,414 |
|
|
$ |
514,720,245 |
|
|
$ |
531,295,185 |
|
| |
|
|
The master trust investment accounts do not have the right to sell or repledge securities pledged
as collateral. During the loan period, the funds continue to retain rights of ownership, including
dividends and interest of the loaned securities.
A loss was generated from securities lending arrangements totaling $22,675,877 for the year ended
December 31, 2008. The $22,675,877 loss was comprised of $5,418,338 of securities lending income
and a $28,094,215 loss recorded to the Global Bond Fund as a result of the value of its securities
lending program’s collateral pool being less than the cash collateral that it owed to borrowers by
$28,094,215 at December 31, 2008. The loss was included in the net realized and unrealized
appreciation/(depreciation) in fair value of investments in the summary of net investment income in
the asset class master trust investment accounts as disclosed in Note 3: Master Trust Investment
Accounts.
31
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
9. Securities Lending (continued)
On April 7, 2009, Mellon terminated the collective securities lending collateral pool and the
Global Bond Fund received its pro rata interest in the collateral pool to be held as a separate
account within the Master Trust. The Investment Policy Committee will have discretionary authority
over the investment policy for the separate account going forward.
10. Concentration of Credit Risk
The Plan’s exposure to a concentration of credit risk is limited by the diversification of
investments across multiple participant-directed fund elections. With the exception of the Intel
Stock Fund, the investments within each participant-directed fund election are further diversified
into varied financial instruments. The Intel Stock Fund invests in a single security. The Plan’s
exposure to credit risk on the wrapper contracts is limited to the fair value of the contracts with
each counterparty. Collateral has been obtained and secured against investments whenever deemed
necessary.
11. Income Tax Status
The Plan has received a determination letter from the IRS dated February 7, 2006, stating that the
Plan is qualified under Section 401(a) of the Code, and therefore the related trust is exempt from
taxation. Subsequent to this issuance of the determination letter, the Plan was amended and
restated. Once qualified, the Plan is required to operate in conformity with the Code to maintain
its qualification. The plan sponsor believes the Plan is being operated in compliance with the
applicable requirements of the Code and has indicated that it will take the necessary steps, if
any, to maintain the qualified status of the Plan. Therefore, the plan sponsor believes that the
Plan, as amended and restated, is qualified and the related trust is tax-exempt.
12. Plan Termination
The company has the right under the Plan to amend and terminate the Plan at any time for any
reason. In the event of a plan termination, participants will remain 100% vested in their accounts.
32
Intel Corporation 401(k) Savings Plan
Notes to Financial Statements (continued)
13. Prohibited Transactions
During 2008, the company failed to remit to the Plan certain employee contributions and participant
loan repayments totaling $5,604, within the time period prescribed by the Department of Labor (DOL)
regulations. The DOL considers late remittances to be prohibited transactions. Delays in remitting
contributions and loan repayments to the Plan were due to administrative errors.
14. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements
to the Form 5500:
| |
|
|
|
|
|
|
|
|
| |
|
December 31, |
|
| |
|
2008 |
|
|
2007 |
|
| |
|
|
Net assets available for benefits per
the financial statements |
|
$ |
2,952,698,646 |
|
|
$ |
4,309,031,419 |
|
Less: adjustment between fair value and
contract value related to fully
benefit-responsive investment contracts
held by the Stable Value Fund master
trust investment account |
|
|
(6,604,779 |
) |
|
|
(621,296 |
) |
| |
|
|
Net assets available for benefits per the Form 5500 |
|
$ |
2,946,093,867 |
|
|
$ |
4,308,410,123 |
|
| |
|
|
The following is a reconciliation of net investment income per the financial statements for the
year ended December 31, 2008, to the Form 5500:
| |
|
|
|
|
Net investment loss from participation in master trust
investment accounts per the financial statements |
|
$ |
(164,592,985 |
) |
Change in adjustment between fair value and contract
value related to fully benefit-responsive investment
contracts held by the Stable Value Fund master trust
investment account |
|
|
(5,983,483 |
) |
|
|
|
|
Net investment loss from master trust investment accounts
per the Form 5500 |
|
$ |
(170,576,468 |
) |
|
|
|
|
33
Intel Corporation 401(k) Savings Plan
EIN: 94-1672743, Plan Number: 003
Schedule H, Line 4a — Schedule of Delinquent Participant Contributions
Year Ended December 31, 2008
| |
|
|
Participant Contributions and Participant
Loan Repayments Transferred Late to
Plan
|
|
Total that Constitutes Nonexempt
Prohibited Transactions |
| |
| |
|
|
| $5,604
|
|
$5,604 |
34
Intel Corporation 401(k) Savings Plan
EIN: 94-1672743, Plan Number: 003
Schedule H, Line 4i — Schedule of Assets (Held At End of Year)
December 31, 2008
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
(c) |
|
|
|
|
| |
|
|
|
|
|
Description of Investment, |
|
|
|
|
| |
|
|
|
|
|
Including Maturity Date, |
|
|
|
|
| |
|
|
|
(b) |
|
Rate of Interest, |
|
|
(e) |
|
| |
|
|
|
Identity of Issue, Borrower, |
|
Collateral, |
|
|
Current |
|
| (a) |
|
|
Lessor, or Similar Party |
|
Par, or Maturity Value |
|
|
Value |
|
| |
| |
| |
|
|
|
Mutual funds: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
AIM Basic Value |
|
|
75,575 |
shares |
|
$ |
1,022,531 |
|
| |
|
|
|
Allianz CCM Capital Appreciation Fund |
|
|
231,387 |
shares |
|
|
2,818,292 |
|
| |
|
|
|
Allianz CCM Mid Cap Fund |
|
|
377,887 |
shares |
|
|
5,970,608 |
|
| |
|
|
|
American Century Equity Income Fund |
|
|
1,139,963 |
shares |
|
|
6,862,576 |
|
| |
|
|
|
American Century Real Estate Fund |
|
|
1,470,467 |
shares |
|
|
17,175,056 |
|
| |
|
|
|
American Century Small Cap Value Fund |
|
|
1,638,067 |
shares |
|
|
8,812,799 |
|
| |
|
|
|
American Century Small Company Fund |
|
|
1,863,058 |
shares |
|
|
9,594,750 |
|
| |
|
|
|
American Funds EuroPacific Growth Fund |
|
|
5,317,572 |
shares |
|
|
148,626,143 |
|
| |
|
|
|
American Funds Growth Fund of America |
|
|
1,043,095 |
shares |
|
|
21,320,870 |
|
| |
|
|
|
Blackrock Global Allocation Fund |
|
|
1,278,876 |
shares |
|
|
19,208,713 |
|
| |
|
|
|
Blackrock Global Small Cap Fund, Inc. |
|
|
1,102,711 |
shares |
|
|
16,198,819 |
|
| |
|
|
|
Brandywine Blue Fund, Inc. |
|
|
1,505,946 |
shares |
|
|
29,847,858 |
|
| |
|
|
|
Calvert Social Investment Bond Fund |
|
|
573,826 |
shares |
|
|
8,148,335 |
|
| |
|
|
|
Calvert Social Investment Equity Fund |
|
|
95,372 |
shares |
|
|
2,307,997 |
|
| |
|
|
|
Delaware Pooled International Equity Fund |
|
|
1,568,723 |
shares |
|
|
17,726,573 |
|
| |
|
|
|
Dodge & Cox Stock Fund |
|
|
1,063,496 |
shares |
|
|
79,092,192 |
|
| |
|
|
|
Evergreen International Bond Fund |
|
|
2,011,785 |
shares |
|
|
20,821,974 |
|
| |
* |
|
|
Fidelity Capital & Income Fund |
|
|
7,413,613 |
shares |
|
|
40,478,327 |
|
| |
* |
|
|
Fidelity Contrafund |
|
|
4,143,207 |
shares |
|
|
187,521,542 |
|
| |
* |
|
|
Fidelity Growth Company Fund |
|
|
2,766,510 |
shares |
|
|
135,448,327 |
|
| |
* |
|
|
Fidelity Low-Priced Stock Fund |
|
|
7,257,929 |
shares |
|
|
167,803,318 |
|
| |
* |
|
|
Fidelity Mid-Cap Stock Fund |
|
|
1,163,617 |
shares |
|
|
18,164,061 |
|
| |
* |
|
|
Fidelity Puritan Fund |
|
|
3,881,747 |
shares |
|
|
50,695,622 |
|
| |
* |
|
|
Fidelity U.S. Treasury Money Market |
|
|
156,231,113 |
shares |
|
|
156,231,113 |
|
| |
|
|
|
Franklin Income Fund |
|
|
5,635,673 |
shares |
|
|
9,355,217 |
|
| |
|
|
|
GAMCO Gold AAA |
|
|
2,349,382 |
shares |
|
|
47,058,112 |
|
| |
|
|
|
GMO Emerging Countries Fund |
|
|
4,619,763 |
shares |
|
|
27,348,995 |
|
| |
* |
|
|
Goldman Sachs Mid Cap Value Fund |
|
|
1,295,056 |
shares |
|
|
28,750,245 |
|
| |
* |
|
|
Goldman Sachs Small Cap Value Fund |
|
|
198,440 |
shares |
|
|
5,137,602 |
|
| |
|
|
|
Legg Mason Special Investment Trust |
|
|
194,501 |
shares |
|
|
3,751,923 |
|
| |
|
|
|
Legg Mason Value Trust, Inc. |
|
|
225,169 |
shares |
|
|
6,775,321 |
|
| |
|
|
|
Longleaf Partners Fund |
|
|
435,814 |
shares |
|
|
6,837,923 |
|
35
Intel Corporation 401(k) Savings Plan
EIN: 94-1672743, Plan Number: 003
Schedule H, Line 4i — Schedule of Assets (Held At End of Year) (continued)
December 31, 2008
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
(c) |
|
|
|
|
| |
|
|
|
|
|
Description of Investment, |
|
|
|
|
| |
|
|
|
|
|
Including Maturity Date, |
|
|
|
|
| |
|
|
|
(b) |
|
Rate of Interest, |
|
|
(e) |
|
| |
|
|
|
Identity of Issue, Borrower, |
|
Collateral, |
|
|
Current |
|
| (a) |
|
|
Lessor, or Similar Party |
|
Par, or Maturity Value |
|
|
Value |
|
| |
| |
| |
|
|
|
Loomis Sayles Bond |
|
|
2,991,205 |
shares |
|
$ |
31,078,618 |
|
| |
|
|
|
Merger Fund |
|
|
152,804 |
shares |
|
|
2,188,151 |
|
| |
|
|
|
Morgan Stanley Institutional Fund
International Small Cap |
|
|
1,129,110 |
shares |
|
|
10,760,419 |
|
| |
|
|
|
Morgan Stanley Institutional Fund
Trust Value Portfolio |
|
|
238,115 |
shares |
|
|
2,357,340 |
|
| |
|
|
|
Pennsylvania Mutual Fund |
|
|
2,264,168 |
shares |
|
|
15,713,328 |
|
| |
* |
|
|
PIMCO Emerging Markets Bond Fund |
|
|
1,643,721 |
shares |
|
|
13,922,319 |
|
| |
* |
|
|
PIMCO High Yield Fund |
|
|
855,646 |
shares |
|
|
5,724,270 |
|
| |
* |
|
|
PIMCO Long-Term U.S. Government Fund |
|
|
1,400,995 |
shares |
|
|
16,699,857 |
|
| |
* |
|
|
PIMCO Total Return Fund |
|
|
9,417,994 |
shares |
|
|
95,498,454 |
|
| |
|
|
|
Reserve Primary Institutional |
|
|
33,494,896 |
shares |
|
|
27,191,799 |
|
| |
|
|
|
T Rowe Price Growth Stock Fund |
|
|
463,395 |
shares |
|
|
8,915,717 |
|
| |
|
|
|
TCW Galileo Value Opportunities Fund |
|
|
180,768 |
shares |
|
|
2,114,982 |
|
| |
|
|
|
Templeton Growth Fund |
|
|
650,759 |
shares |
|
|
8,485,894 |
|
| |
|
|
|
Vanguard Convertible Securities Fund |
|
|
491,756 |
shares |
|
|
4,573,333 |
|
| |
|
|
|
Vanguard Growth Index Fund |
|
|
2,780,241 |
shares |
|
|
56,438,901 |
|
| |
|
|
|
Vanguard Inflation-Protected Securities Fund |
|
|
2,721,661 |
shares |
|
|
25,066,496 |
|
| |
|
|
|
Vanguard Institutional Index Fund |
|
|
1,976,685 |
shares |
|
|
163,155,571 |
|
| |
|
|
|
Vanguard International Value Fund |
|
|
2,284,346 |
shares |
|
|
53,522,218 |
|
| |
|
|
|
Vanguard Long-Term Bond Index Fund |
|
|
961,564 |
shares |
|
|
11,529,155 |
|
| |
|
|
|
Vanguard Mid-Cap Index Fund |
|
|
2,300,401 |
shares |
|
|
27,190,738 |
|
| |
|
|
|
Vanguard Small-Cap Growth Index Fund |
|
|
1,216,009 |
shares |
|
|
14,482,668 |
|
| |
|
|
|
Vanguard Small-Cap Value Index Fund |
|
|
861,904 |
shares |
|
|
8,808,658 |
|
| |
|
|
|
Vanguard Strategic Equity Fund |
|
|
728,670 |
shares |
|
|
8,525,435 |
|
| |
|
|
|
Vanguard Windsor Fund |
|
|
126,881 |
shares |
|
|
3,860,986 |
|
| |
|
|
|
Vanguard Intermediate-Term Treasury Fund |
|
|
4,363,558 |
shares |
|
|
52,799,053 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Total mutual funds |
|
|
|
|
|
|
|
|
|
|
1,977,518,094 |
|
36
Intel Corporation 401(k) Savings Plan
EIN: 94-1672743, Plan Number: 003
Schedule H, Line 4i — Schedule of Assets (Held At End of Year) (continued)
December 31, 2008
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
(c) |
|
|
|
|
| |
|
|
|
|
|
Description of Investment, |
|
|
|
|
| |
|
|
|
(b) |
|
Including Maturity Date, |
|
|
(e) |
|
| |
|
|
|
Identity of Issue, Borrower, |
|
Rate of Interest, Collateral, |
|
|
Current |
|
| (a) |
|
|
Lessor, or Similar Party |
|
Par, or Maturity Value |
|
|
Value |
|
| |
| |
| |
|
|
|
Common collective trust funds: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
* |
|
|
Barclays Global Investors NASDAQ-100 Index Fund |
|
|
2,977,739 |
units |
|
$ |
32,725,351 |
|
| |
|
|
|
Lazard Emerging Markets Institutional Fund |
|
|
3,488,983 |
units |
|
|
28,086,317 |
|
| |
* |
|
|
Pooled Employee Funds Daily Liquidity Fund |
|
|
385,075 |
units |
|
|
385,075 |
|
| |
|
|
|
SSgA Daily Active Emerging Markets
Non-Lending Series Fund |
|
|
3,287,977 |
units |
|
|
25,261,530 |
|
| |
|
|
|
SSgA NASDAQ 100 Index Non-Lending Series Fund |
|
|
2,367,074 |
units |
|
|
17,805,130 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Total common collective trust funds |
|
|
|
|
|
|
|
|
|
|
104,263,403 |
|
| |
| |
|
|
|
Common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
* |
|
|
Intel Corporation |
|
|
17,590,939 |
shares |
|
|
257,883,169 |
|
| |
* |
|
|
Participant loans |
|
Interest at 5.00% – 11.5%,
maturing through 2029 |
|
|
54,498,071 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
|
|
Total investments |
|
|
|
|
|
|
|
|
|
$ |
2,394,162,737 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Column (d) for Cost has been omitted as investments are participant-directed |
| |
| * |
|
Indicates a party-in-interest |
37
SIGNATURES
The Plan. Pursuant to the requirements of the Securities and Exchange Act of
1934, the Plan Administrator has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
| |
|
|
|
|
| |
INTEL CORPORATION 401(k) SAVINGS PLAN
(Name of Plan)
|
|
| Date: June 19, 2009 |
By: |
/s/ Stacy J. Smith
|
|
| |
|
Stacy J. Smith |
|
| |
|
Vice President,
Chief Financial Officer and
Principal Accounting Officer |
|
| |
38