401K Document 12.31.2012


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 11-K

(Mark One)

  X      ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2012

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 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 401(k) Savings Plan
Financial Statements and
Supplemental Schedule
As of December 31, 2012 and 2011, and
for the Year Ended December 31, 2012



Contents

    
 
 
 
 
1

 
 
Audited Financial Statements
 
2

3

4

 
 
Supplemental Schedule
 
42

 
 
43

 
 
44










Report of Independent Registered Public Accounting Firm
The Retirement Plans Administrative Committee
Intel 401(k) Savings Plan
We have audited the accompanying statements of net assets available for benefits of Intel 401(k) Savings Plan as of December 31, 2012 and 2011, and the related statement of changes in net assets available for benefits for the year ended December 31, 2012. 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 Intel 401(k) Savings Plan at December 31, 2012 and 2011, and the changes in its net assets available for benefits for the year ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2012, is presented for purposes of additional analysis and is not a required part of the financial statements but is 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. Such information has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
San Jose, California
June 14, 2013



1


Intel 401(k) Savings Plan
Statements of Net Assets Available for Benefits
                





 
 
December 31
 
 
2012
 
2011
Assets
 
 
 
 
Value of interest in master trust investment accounts
 
$
3,810,259,874

 
$
3,365,735,538

Investments
 
2,040,175,492

 
1,631,019,494

 
 


 
 
Receivables:
 
 
 
 
Notes receivable from participants
 
79,894,430

 
71,528,717

Interest and dividends receivable
 
57

 
51

Receivable from brokers for securities sold
 
593,465

 
398,688

Employee contributions receivable
 
352,690

 
118,017

Employer discretionary contributions receivable
 
15,991,107

 
2,725,556

Total receivables
 
96,831,749

 
74,771,029

Total assets
 
5,947,267,115

 
5,071,526,061

 
 
 
 
 
Liabilities
 
 
 
 
Due to brokers for securities purchased
 
2,145,824

 
819,765

Total liabilities
 
2,145,824

 
819,765

Net assets reflecting investments at fair value
 
5,945,121,291

 
5,070,706,296

Adjustment from fair value to contract value for fully benefit-responsive investment contracts held by the Stable Value Fund master trust investment account
 
(13,882,163
)
 
(7,961,502
)
Net assets available for benefits
 
$
5,931,239,128

 
$
5,062,744,794

See accompanying notes.




2


Intel 401(k) Savings Plan
Statement of Changes in Net Assets Available for Benefits

Year Ended December 31, 2012

Additions to (deductions from) net assets attributed to:
 
  Employee contributions
$
516,406,638

Employer discretionary contributions
15,991,107

Interest and dividend income
69,836,677

Net investment income from participation in master trust investment accounts
345,561,090

Net realized and unrealized appreciation in fair value of investments
94,774,897

Benefits paid to participants and participant withdrawals
(173,322,541
)
Administrative fees
(345,091
)
Transfers to other plan
(408,443
)
Net increase
868,494,334

 
 
Net assets available for benefits:
 
Beginning of year
5,062,744,794

End of year
$
5,931,239,128

See accompanying notes.




3



Intel 401(k) Savings Plan
Notes to Financial Statements
December 31, 2012


1. Description of the Plan
The following description of the Intel 401(k) Savings Plan (the Plan) provides only general information. Participants should refer to the summary plan description for a more complete description of the Plan’s provisions. The plan document contains the definitive legal provisions governing the Plan.
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 at any time on or after their date of hire. All employees who become eligible to participate are automatically enrolled in the Plan unless they make an affirmative election not to participate. Employees hired on or after January 1, 2011 but prior to January 1, 2013 were automatically enrolled at a pretax contribution rate of 3% of regular pay with this amount increasing by 1% each April 1 of each successive plan year to a maximum of 10% of regular pay. Employees hired on or after January 1, 2013 are automatically enrolled at a pretax contribution rate of 6% of regular pay with this amount increasing by 2% each April 1 of each successive plan year to a maximum of 16% of regular pay. Contributions for participants who are automatically enrolled are deposited in the appropriate Target Date Fund, which invests in varying percentages of master trust investment accounts based on the participants' ages. Employee contributions are subject to the limitations as set forth in the plan document.
As of January 1, 2011 (the effective date), the Company closed the Intel Minimum Pension Plan (the Intel Pension Plan) and the Intel Retirement Contribution Plan (the Intel Contribution Plan) to employees hired on or after the effective date. Employees hired on or after the effective date will receive an annual contribution, the Discretionary Intel Contribution, in their Discretionary Intel Contribution Account.
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
State Street Bank and Trust Company (State Street) is the trustee for the Plan and the Intel Corporation Retirement Plans Master Trust (the Master Trust) and held all investments of the Plan and the Master Trust directly or through a sub-trust for which Fidelity Management Trust Company is the sub-trustee.


4


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)



Administration of the Plan
The Company’s Finance Committee appoints the members of the Retirement Plans Administrative Committee (RPAC) and the Investment Policy Committee (IPC). The RPAC is the fiduciary responsible for the general operation and administration of the Plan. The IPC is the fiduciary responsible for the management and control of Plan assets. The Company is the plan sponsor, as defined by ERISA. Fidelity Workspace Services LLC is the Plan’s record keeper.
Contributions and Participant Accounts
Participant Contributions
Participants may make pretax contributions, after-tax Roth 401(k) contributions, or a combination of both, up to 50% of their annual eligible 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 are eligible to contribute an additional portion of their annual compensation as catch-up contributions, up to the annual IRS limit. Participants can elect to invest in any combination of the available investment options offered under the Plan, in addition to mutual funds and exchange-traded funds available through a self-directed brokerage account. 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.
Company Contributions
For eligible participants, the Plan provides for the Company, at its discretion, to make an annual contribution to their Discretionary Intel Contribution Account, subject to certain limitations of the Code. Amounts to be contributed are determined by the Chief Executive Officer of the Company under delegation from the Board of Directors, pursuant to the terms of the Plan.
Generally, only eligible participants employed by the Company on the last day of the plan year and who have completed one year of service as defined by the plan document are eligible to receive the Company contribution, except in the event of death, job elimination, divestiture, total and permanent disability, or attainment of the normal or early retirement date occurring during the plan year. Participants have authority over the investment allocation of Company contributions.

5


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


Participant Accounts
Separate accounts are maintained for each participant. The account balances are generally adjusted as follows:
Biweekly or semimonthly for participant contributions.
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.
Annual discretionary employer contributions to the Discretionary Intel Contribution Account are allocated at the end of each calendar year in the ratio that each participant’s adjusted compensation for the plan year bears to the total adjusted compensation of all participants eligible for a contribution for that plan year. The adjusted compensation of a participant equals the participant’s current year eligible compensation, as defined in the plan document.
Employee Stock Ownership Plan (ESOP)
Under the terms of the Plan, the Intel Stock Fund is an 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.
Vesting
Participants are immediately 100% vested with respect to employee contributions and related earnings.
Participants vest in the discretionary employer contributions to their Discretionary Intel Contribution Account and related earnings according to the following schedule:
Years of Service
Vesting
 
 
Fewer than 2
0
%
2 but less than 3
20

3 but less than 4
40

4 but less than 5
60

5 but less than 6
80

6 or more
100


The value of each participant’s account becomes 100% vested when the participant reaches age 60, upon death, or upon total and permanent disability. In addition, the value of each participant’s account may also become 100% vested upon job elimination or upon termination of employment

6


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


due to a divestiture. For participants who withdrew from the Plan during 2012, unvested account balances of approximately $48,000 were forfeited during the year ended December 31, 2012. The Company took these forfeited amounts into account in determining its contribution for 2012.
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 the employee contribution portion of 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, monthly annuity payments, partial distribution (not available to beneficiaries), 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 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 $408,443 for the year ended December 31, 2012.
Notes Receivable From Participants
Active 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 Contribution Plan. No more than two loans may be outstanding at any time. Participants’ account balances secure their loans. The interest rate on these loans is based on the prime rate plus 1% as reported by Reuters on the last business day of each month. Loan provisions are established by the RPAC and administered by the record keeper.
Participants may choose to obtain loans from either this Plan or the Intel Contribution Plan. Repayments of loans are transferred to the participants’ Plan and Intel Contribution Plan accounts in the ratio in which their accounts provided funding for the loan. Participant loans are classified as notes receivable from participants on the statements of net assets available for benefits and are valued at their unpaid principal balance, plus accrued but unpaid interest. The interest earned on these loans is included with interest and dividend income on the statement of changes in net assets available for benefits.
Administrative Expenses
A portion of the expenses for administration of the Plan is paid from asset-based credits received from certain mutual funds. Any remaining administrative expenses are paid by the Company.

7


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


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 (GAAP).
Investment Valuation
A portion of the investments of the Plan is held in the Master Trust, which consists of the assets of the Plan, the Intel Contribution 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. In 2012 and 2011, the Plan participated in all nine master trust accounts. See Note 3, "Master Trust Investment Accounts," for the details 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.
The Plan, either directly or through investments in master trust investment accounts, holds investments in registered mutual funds, common collective trust funds, equity securities, exchange-traded funds, fixed-income debt instruments, derivative financial instruments, marketable limited partnerships or corporations, securities lending collateral, and non-marketable limited partnerships, 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 the 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 their unit price based on the fair value of the underlying assets in the partnership or corporation. Non-marketable limited partnerships are valued at their unit price, or equivalent, based on the fair value of the underlying assets in the partnership.
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.

8


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


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.
The Global Bond Fund may enter into short-sale 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 subsequently repurchases 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. Fixed-maturity synthetic (FMS) GICs, constant-duration synthetic (CDS) GICs and pooled separate account (PSA) GICs held in the Stable Value Fund are also stated at fair value. For FMS GICs and CDS GICs, this includes a value for the underlying assets held plus a value for the wrap contracts related to the investment. The fair value of the underlying assets held is determined by either security market prices or the net asset value, as in the case of the PSA GICs. The wrap contract valuations are stated at fair value based on a replacement cost determined by BNY Mellon Cash Investment Strategies, a division of The Dreyfus Corporation (BNY Mellon) and the Stable Value Fund’s investment manager. The Stable Value Fund is allocated to the Plan and the Intel Contribution Plan based on each plans’ proportionate share of the underlying assets.
Investment contracts held by a defined contribution plan are reported at fair value. However, 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)

9


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


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.
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 withheld. Company contributions are accrued in the period in which they become obligations of the Company, pursuant to the terms of the plan document.
Use of Estimates
The preparation of financial statements in conformity with GAAP 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.
Accounting Changes
2012
In 2012, the Plan adopted a new standard that required additional fair value disclosures. For assets and liabilities categorized as Level 3 and recognized at fair value, the standard required additional disclosures around the unobservable inputs as well as the valuation processes used by the entity. The adoption of this standard did not have a significant impact on the Plan’s financial statements.

10


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


3. Master Trust Investment Accounts
Most of the Plan’s investments are held in master trust investment accounts.
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:
 
December 31
 
2012
2011
 
 
 
U.S. Large Cap Stock Fund
44.5
%
45.1
%
International Stock Fund
49.0

48.1

Global Bond Fund
18.9

17.3

U.S. Small Cap Stock Fund
58.9

54.2

Stable Value Fund
78.8

79.7

Alternative Investments Fund
0.4

0.4

Emerging Markets Fund
41.8

43.2

Hedge Fund
35.1

36.6

Commodities Fund
41.0

36.9

 
 
 


11


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


The following table presents the net assets available for benefits of the nine master trust investment accounts as of December 31, 2012:
 
U.S. Large Cap
International
Global
U.S. Small Cap
Stable
Alternative Investments
Hedge
Commodities
Emerging Markets
 
Assets
Stock Fund
Stock Fund
Bond Fund
Stock Fund
Value Fund
Fund
Fund
Fund
Fund
Total
Cash
$

$
18,138

$
22,446,112

$

$

$

$

$

$
121

$
22,464,371

Interest-bearing cash




40,486,783





40,486,783

Common collective trust funds
1,116,601,598

501,163,572

53,320,931

16,659,606

462,574,312

5,576,021

476,945

150,803,164

1,111,754,859

3,418,931,008

U.S. corporate bonds

14,752,445

551,909,171


3,787,848





570,449,464

International corporate bonds

26,860,827

170,269,194







197,130,021

U.S. government bonds


553,383,599


117,210





553,500,809

International government bonds

25,955,006

318,888,863







344,843,869

Municipal bonds


35,055,935







35,055,935

Mortgage-backed securities


66,531,993


4,355,426





70,887,419

Collateralized debt obligations


221,914,019


2,594,828





224,508,847

Mutual funds
617,595,727









617,595,727

Exchange-traded fund



150,978,544






150,978,544

U.S. corporate stocks

254,739,273


98,826,334






353,565,607

International corporate stocks

453,810,909


4,442,265






458,253,174

Preferred stocks

6,324,993

4,221,002







10,545,995

Traditional guaranteed investment contracts




22,997,032





22,997,032

Pooled separate accounts




92,191,129





92,191,129

Other receivables
50

2,354,791

16,803,379

47,073

30,092

527

320

17

25

19,236,274

Receivable from brokers for securities sold
627,254

671,754





20,537,569


345,784

22,182,361

Receivable for investments sold on a delayed-delivery basis


375,817,689







375,817,689

Wrap contracts




100,164





100,164

Derivative assets

1,040,488

4,583,940







5,624,428

Marketable limited partnerships and corporations






2,131,667,642

229,422,567


2,361,090,209

Non-marketable limited partnerships





478,878,481




478,878,481

Investments of securities lending collateral 1

30,813,413

103,693,246

197,096,964






331,603,623

Total assets, fair value
$
1,734,824,629

$
1,318,505,609

$
2,498,839,073

$
468,050,786

$
629,234,824

$
484,455,029

$
2,152,682,476

$
380,225,748

$
1,112,100,789

$
10,778,918,963





12


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


 
U.S. Large Cap
International
Global
U.S. Small Cap
Stable
Alternative Investments
Hedge
Commodities
Emerging Markets
 
Stock Fund
Stock Fund
Bond Fund
Stock Fund
Value Fund
Fund
Fund
Fund
Fund
Total
Liabilities
 
 
 
 
 
 
 
 
 
 
Accrued administrative fees
$
94,739

$
1,867,327

$
9,806,390

$
609,633

$
270,571

$
74,748

$
27,267

$
412,683

$
935,071

$
14,098,429

Payable to brokers for securities purchased
3,469

603,456


165,844





8,238

781,007

Other payables


1,508,535







1,508,535

Payable for investments sold on a delayed-delivery basis


359,258,746







359,258,746

Payable to brokers for collateral on deposit


4,061,000







4,061,000

Derivative liabilities

4,173,479

14,933,077







19,106,556

Payable for securities lending collateral

31,490,847

105,972,944

198,111,057






335,574,848

Total liabilities, at fair value
98,208

38,135,109

495,540,692

198,886,534

270,571

74,748

27,267

412,683

943,309

734,389,121

Net assets available for benefits, at fair value
1,734,726,421

1,280,370,500

2,003,298,381

269,164,252

628,964,253

484,380,281

2,152,655,209

379,813,065

1,111,157,480

10,044,529,842

Adjustment from fair value to contract value for fully benefit-responsive investment contracts held




(17,616,958
)




(17,616,958
)
Net assets available for benefits
$
1,734,726,421

$
1,280,370,500

$
2,003,298,381

$
269,164,252

$
611,347,295

$
484,380,281

$
2,152,655,209

$
379,813,065

$
1,111,157,480

$
10,026,912,884




13


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


The following table presents the net assets available for benefits of the nine master trust investment accounts as of December 31, 2011. As a result of further analysis of the master trust financial instruments, approximately $20.6 million of collateralized debt obligations that were previously reported as U.S. corporate bond investments at December 31, 2011 have been reclassified. This revision in the disclosed classification had no effect on the reported fair values of these instruments or on the Plan's financial statements.
Assets
U.S. Large Cap Stock Fund
International Stock Fund
Global Bond Fund
U.S. Small Cap Stock Fund
Stable Value Fund
Alternative Investments Fund
Hedge Fund
Commodities Fund
Emerging Markets Fund
Total
Cash
$
69,300

$
3,494,889

$
23,740,072

$

$

$

$

$

$
20,000,121

$
47,304,382

Common collective trust funds
929,350,192

446,978,958

178,872,790

22,809,839

504,958,497

3,263,537

11,117,287

157,957,264

943,324,999

3,198,633,363

U.S. corporate bonds

15,076,105

360,272,460


3,943,530





379,292,095

International corporate bonds

18,394,583

129,545,896







147,940,479

U.S. government bonds


709,663,293


9,578,447





719,241,740

International government bonds

26,633,269

372,257,257







398,890,526

Municipal bonds


25,054,988







25,054,988

Mortgage-backed securities


73,513,689


6,790,739





80,304,428

Collateralized debt obligations


221,279,722


5,869,523





227,149,245

Other fixed-income debt instruments



2,876,525






2,876,525

Mutual funds
482,444,234









482,444,234

Exchange-traded fund



72,338,486






72,338,486

U.S. corporate stocks
13,296

191,193,978


118,949,407






310,156,681

International corporate stocks

422,069,552


43,286,018






465,355,570

Preferred stocks

6,227,455

3,072,335







9,299,790

Traditional guaranteed investment contracts




4,873,301





4,873,301

Pooled separate accounts




60,258,127





60,258,127

Other receivables
27

2,238,734

15,374,059

189,653

112,644

387

562

22

31

17,916,119

Receivable from brokers for securities sold
947,653

2,442,071


77,747



11,041,676

178,294

336,501

15,023,942

Receivable for investments sold on a delayed-delivery basis


165,128,283







165,128,283

Wrap contracts




54,788





54,788

Derivative assets

2,789,435

18,239,748







21,029,183

Marketable limited partnerships and corporations






1,848,898,080

227,543,836


2,076,441,916

Non-marketable limited partnerships





345,136,833




345,136,833

Investments of securities lending collateral 1

87,080,668

108,565,798

108,630,421






304,276,887

Total assets, fair value
$
1,412,824,702

$
1,224,619,697

$
2,404,580,390

$
369,158,096

$
596,439,596

$
348,400,757

$
1,871,057,605

$
385,679,416

$
963,661,652

$
9,576,421,911



14


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


 
U.S. Large Cap
International
Global
U.S. Small Cap
Stable
Alternative Investments
Hedge
Commodities
Emerging Markets
 
Stock Fund
Stock Fund
Bond Fund
Stock Fund
Value Fund
Fund
Fund
Fund
Fund
Total
Liabilities
 
 
 
 
 
 
 
 
 
 
Accrued administrative fees
$
74,324

$
1,510,040

$
5,710,639

$
384,779

$
318,534

$
434,818

$
28,961

$
216,208

$
740,101

$
9,418,404

Other payables


831,255







831,255

Payable to brokers for securities purchased

72,440


1,586,247





20,000,000

21,658,687

Payable for investments sold on a delayed-delivery basis


228,516,431







228,516,431

Payable to brokers for collateral on deposit


6,067,557







6,067,557

Derivative liabilities

885,534

23,991,083







24,876,617

Securities sold, not yet purchased


105,637,108







105,637,108

Payable for securities lending collateral

89,116,208

111,103,560

109,461,576






309,681,344

Total liabilities, at fair value
74,324

91,584,222

481,857,633

111,432,602

318,534

434,818

28,961

216,208

20,740,101

706,687,403

Net assets available for benefits, at fair value
1,412,750,378

1,133,035,475

1,922,722,757

257,725,494

596,121,062

347,965,939

1,871,028,644

385,463,208

942,921,551

8,869,734,508

Adjustment from fair value to contract value for fully benefit-responsive investment contracts held




(9,989,337
)




(9,989,337
)
Net assets available for benefits
$
1,412,750,378

$
1,133,035,475

$
1,922,722,757

$
257,725,494

$
586,131,725

$
347,965,939

$
1,871,028,644

$
385,463,208

$
942,921,551

$
8,859,745,171


1 The balances at December 31, 2012 and December 31, 2011 were related to cash collateral received in connection with the securities lending program, the majority of which was invested in money market funds. See Note 9, "Securities Lending," for further discussion on this program.


The following is a summary of the net investment income (loss) in the master trust investment accounts for the year ended December 31, 2012:
 
U.S. Large Cap Stock Fund
International Stock Fund
Global Bond Fund
U.S. Small Cap Stock Fund
Stable Value Fund
Alternative Investments Fund
Hedge Fund
Commodities Fund
Emerging Markets Fund
Total
 
 
 
 
 
 
 
 
 
 
 
Net realized and unrealized appreciation (depreciation) in fair value of investments
$
152,266,708

$
152,205,667

$
84,525,454

$
18,403,865

$
11,801,522

$
54,200,409

$
142,966,597

$
(59,644
)
$
183,851,328

$
800,161,906

Interest and dividends
59,876,936

21,294,004

69,463,606

5,517,313

1,482,293

6,031

5,318

234

898

157,646,633

Administrative fees
(290,653
)
(7,752,965
)
(12,083,433
)
(1,685,438
)
(1,121,267
)
(2,464,812
)
(530,598
)
(304,809
)
(1,282,200
)
(27,516,175
)
Net investment income (loss)
$
211,852,991

$
165,746,706

$
141,905,627

$
22,235,740

$
12,162,548

$
51,741,628

$
142,441,317

$
(364,219
)
$
182,570,026

$
930,292,364




15


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


The following is a summary of the net realized and unrealized appreciation (depreciation) in fair value of investments by major investment type in the master trust investment accounts for the year ended December 31, 2012:

U.S. Large Cap Stock Fund
International Stock Fund
Global Bond Fund
U.S. Small Cap Stock Fund
Stable Value Fund
Alternative Investments Fund
Hedge Fund
Commodities Fund
Emerging Markets
Total
Common collective trust funds
$
146,991,570

$
64,927,408

$

$

$
11,921,294

$

$

$

$
183,851,328

$
407,691,600

Corporate bonds

15,175,528

49,387,561







64,563,089

Government bonds


24,134,526







24,134,526

Asset-backed securities


34,536,377


(119,772
)




34,416,605

Registered mutual funds
5,275,138









5,275,138

Exchange-traded fund



18,244,264






18,244,264

Corporate stocks

87,844,600


159,601






88,004,201

Derivatives

(15,741,869
)
(23,533,010
)






(39,274,879
)
Marketable limited partnerships and corporations






142,966,597

(59,644
)

142,906,953

Non-marketable limited partnerships





54,200,409




54,200,409

Total net realized and unrealized appreciation (depreciation) in fair value of investments
$
152,266,708

$
152,205,667

$
84,525,454

$
18,403,865

$
11,801,522

$
54,200,409

$
142,966,597

$
(59,644
)
$
183,851,328

$
800,161,906

For further fair value information on the assets held in the master trust investment accounts, see the master trust investment accounts fair value disclosure below.

16


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


4. Fair Value
The Plan’s and the master trust investment accounts' financial instruments are stated at fair value. Fair value is 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 and master trust investment accounts consider the principal or most advantageous market in which the Plan and master trust investment accounts would transact, and the Plan and master trust investment accounts also consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, redemption restrictions, and risk of nonperformance.
The Plan’s financial instruments stated at fair value are detailed below, and the fair value of the master trust investment accounts within the Master Trust that the Plan participates in is separately disclosed below the Plan-related disclosures.
Fair Value Hierarchy
The three levels of inputs that may be used to measure fair value are as follows:
Level 1. Quoted prices in active markets for identical assets or liabilities.
Level 1 assets and liabilities may include certain of the Plan’s and master trust investment accounts’ marketable fixed-income debt and equity instruments, registered mutual funds, exchange-traded derivative financial instruments, 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 and liabilities may include certain of the Plan’s and master trust investment accounts’ 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, quoted prices that were adjusted for security-specific restrictions and fixed-income debt instruments, and derivative financial instruments priced using inputs that are observable in the market or can be derived principally from or corroborated with observable market data. Privately negotiated derivatives, also referred to as over the counter (OTC), including currency forward contracts and swap agreements, are valued using observable inputs such as quotations received from the counterparty, dealers, or brokers whenever available and considered reliable. In instances where models are used, the value of the OTC derivative depends upon the contractual terms of, and specific risks inherent in, the instrument, as well

17


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


as the availability and reliability of observable inputs. Such inputs may include prepayment rates, rates of estimated credit losses, interest rates, or discount rates and volatilities, and can generally be corroborated by market data and therefore are classified within Level 2 of the fair value hierarchy. Other marketable instruments in this category generally include certain of the Plan’s or master trust investment accounts’ common collective trust funds, registered mutual funds, certain marketable limited partnerships or corporations that are redeemable in the near term, GICs, CDS GICs, VS GICs, and PSA GICs. The non-binding market consensus prices obtained from pricing providers or brokers are based on proprietary valuation models that incorporate a number of inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and other reference data. Common collective trust funds, registered mutual funds, certain marketable limited partnerships or corporations, and PSA GICs, are valued using the net asset value per share for the investment.
Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that were unable to be corroborated with observable market data.
Level 3 assets and liabilities may include certain of the Plan’s and master trust investment accounts’ marketable limited partnerships or corporations that are not redeemable in the near-term, non-marketable limited partnership investments that are not redeemable in the near-term, wrap contracts for the FMS GICs, CDS GICs, and PSA GICs; common collective trust funds with significant redemption restrictions; and fixed-income debt instruments for which values are determined using inputs that are both unobservable and significant to the values of the instruments being measured. The quantitative unobservable inputs for these investments are not readily available and fair value measurements are based on either the net asset value per share for the investment or third-party pricing information without adjustment. As the Company does not have quantitative information about the significant unobservable inputs, the Company is unable to reasonably assess the sensitivity of the fair value measurements to changes of such inputs, or the impacts of any interrelationships between those inputs and other unobservable inputs used in the related fair value measurements. On an annual basis, the Company obtains and reviews pricing policy statements from third-party pricing providers. Based on this review, the Company has concluded that these fair value measurements are developed in accordance with GAAP.

18


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


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 dividends, cash, and administrative fees, consisted of the following types of instruments as of December 31, 2012:
 
Fair Value Measurements at Reporting Date Using Inputs Classified as
 
 
Level 1
Level 2
Level 3
Total
Assets
 
 
 
 
Common collective trust funds: 
 
 
 
 
Fixed-income funds 
$

$
37,754,212

$

$
37,754,212

International equity funds 

108,892,795


108,892,795

Company common stock 
318,222,297



318,222,297

Registered mutual funds: 
 
 
 
 
Fixed-income funds
360,374,119



360,374,119

U.S. large cap equity funds
517,726,917



517,726,917

U.S. small cap equity funds
208,800,340



208,800,340

International equity funds
119,798,546



119,798,546

Equity precious metal funds
34,367,126



34,367,126

Large cap growth funds
82,517,077



82,517,077

Other mutual funds
202,520,556



202,520,556

Exchange-traded funds
49,201,507



49,201,507

Total assets measured at fair value
$
1,893,528,485

$
146,647,007

$

$
2,040,175,492


For further fair value information on the assets held in the master trust investment accounts, see master trust investment accounts fair value disclosure below.


19


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


The Plan’s assets measured at fair value on a recurring basis, excluding accrued interest and dividends, cash, and administrative fees, consisted of the following types of instruments as of December 31, 2011. Certain amounts in the prior year have been reclassified to conform to the current year presentation.
 
Fair Value Measurements at Reporting Date Using Inputs Classified as
 
 
Level 1
Level 2
Level 3
Total
Assets
 
 
 
 
Common collective trust funds: 
 
 
 
 
Fixed-income funds 
$

$
430,162

$

$
430,162

International equity funds 

75,343,562


75,343,562

Company common stock 
368,676,269



368,676,269

Registered mutual funds: 
 
 
 
 
Fixed-income funds
270,313,527



270,313,527

U.S. large cap equity funds
362,658,769



362,658,769

U.S. small cap equity funds
160,795,365



160,795,365

International equity funds
97,083,628



97,083,628

Equity precious metal funds
39,659,903



39,659,903

Large cap growth funds
72,831,724



72,831,724

Other mutual funds
159,878,682



159,878,682

Exchange-traded funds
23,347,903



23,347,903

Total assets measured at fair value
$
1,555,245,770

$
75,773,724

$

$
1,631,019,494


For further fair value information on the assets held in the master trust investment accounts, see master trust investment accounts fair value disclosure below.

The Plan did not have any financial liabilities measured at fair value on a recurring basis and did not have any assets or liabilities that are measured at fair value on a nonrecurring basis as of December 31, 2012 and 2011.

20


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


The master trust investment accounts’ assets and liabilities measured at fair value on a recurring basis, excluding accrued interest and dividends, cash, and administrative fees, consisted of the following types of instruments as of December 31, 2012, for the nine asset class master trust investment accounts:

Fair Value Measurements at Reporting Date Using Inputs Classified as


Level 1
Level 2
Level 3
Total
Assets








Interest-bearing cash
$

40,486,783

$

$
40,486,783

Common collective trust funds:








Emerging markets fund

1,111,754,859


1,111,754,859

Fixed-income funds

638,114,684


638,114,684

U.S. large cap equity funds

1,116,601,598


1,116,601,598

U.S. small cap equity funds

8,324,737


8,324,737

International equity funds

393,331,966


393,331,966

Specialty funds

150,803,164


150,803,164

U.S. corporate bonds
137,787,753

432,661,711


570,449,464

International corporate bonds
115,525,332

81,604,689


197,130,021

U.S. government bonds
379,749,914

173,750,895


553,500,809

International government bonds
283,179,858

61,664,011


344,843,869

Municipal bonds

35,055,935


35,055,935

Mortgage-backed securities


70,887,419

70,887,419

Collateralized debt obligations


224,508,847

224,508,847

U.S. large cap equity mutual funds
617,595,727



617,595,727

Exchange-traded fund
150,978,544



150,978,544

U.S. corporate stocks
353,565,607



353,565,607

International corporate stocks
458,253,174



458,253,174

Preferred stocks
10,545,995



10,545,995

Traditional guaranteed investment contracts

22,997,032


22,997,032

Pooled separate accounts

92,191,129


92,191,129

Receivable from brokers for securities sold
22,182,361



22,182,361

Receivable for investments sold on a delayed-delivery basis
375,817,689



375,817,689

Wrap contracts


100,164

100,164

Derivative assets
771,380

4,853,048


5,624,428

Marketable limited partnerships or corporations

2,360,092,977

997,232

2,361,090,209

Non-marketable limited partnerships


478,878,481

478,878,481

Investments of securities lending collateral 1

331,603,623


331,603,623

Total assets measured at fair value
$
2,905,953,334

$
7,055,892,841

$
775,372,143

$
10,737,218,318


21


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


 
Fair Value Measurements at Reporting Date Using Inputs Classified as
 
 
Level 1
Level 2
Level 3
Total
Liabilities
 
 
 
 
Payable to brokers for securities purchased
$
781,007

$

$

$
781,007

Payable for investments purchased on a delayed-delivery basis
359,258,746



359,258,746

Payable to brokers for collateral on deposit
4,061,000



4,061,000

Derivative liabilities
1,473,035

17,633,521


19,106,556

Payable for securities lending collateral
335,574,848



335,574,848

Total liabilities measured at fair value
$
701,148,636

$
17,633,521

$

$
718,782,157


During 2012, the Company transferred approximately $292 million of government bonds and corporate bonds from Level 2 to Level 1, primarily based on the increased market activity for the underlying securities. The Plan's policy is to reflect transfers between levels at the beginning of the year in which a change in circumstances resulted in the transfer.

22


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


The master trust investment accounts’ assets and liabilities measured at fair value on a recurring basis, excluding accrued interest and dividends, cash, and administrative fees, consisted of the following types of instruments as of December 31, 2011, for the nine asset class master trust investment accounts. As a result of further analysis of the master trust financial instruments, approximately $20.6 million of collateralized debt obligations that were previously reported as Level 2 U.S. corporate bond investments at December 31, 2011 have been reclassified to Level 3 investments. This revision in the disclosed classification had no effect on the reported fair values of these instruments or on the Plan's financial statements.
 
Fair Value Measurements at Reporting Date Using Inputs Classified as
 
 
 
Level 1
Level 2
Level 3
Total
 
Assets
 
 
 
 
 
Common collective trust funds:
 
 
 
 
 
Emerging markets fund
$

$
943,033,053

$

$
943,033,053

 
Fixed-income funds

762,595,439


762,595,439

 
U.S. large cap equity funds

929,069,553


929,069,553

 
U.S. small cap equity funds

9,916,400


9,916,400

 
International equity funds

396,248,149


396,248,149

 
Specialty funds

157,770,769


157,770,769

 
U.S. corporate bonds

379,292,095


379,292,095
 
International corporate bonds

147,940,479


147,940,479
 
U.S. government bonds
329,560,042

389,681,698


719,241,740
 
International government bonds

398,890,526


398,890,526
 
Municipal bonds

25,054,988


25,054,988
 
Mortgage-backed securities


80,304,428

80,304,428
 
Collateralized debt obligations


227,149,245

227,149,245
 
Other fixed-income debt instruments

2,876,525


2,876,525
 
U.S. large cap equity mutual funds
482,444,234



482,444,234
 
Exchange-traded fund
72,338,486



72,338,486
 
U.S. corporate stocks
310,156,681



310,156,681
 
International corporate stocks
465,355,570



465,355,570
 
Preferred stocks
9,299,790



9,299,790
 
Traditional guaranteed investment contracts

4,873,301


4,873,301
 
Pooled separate accounts

60,258,127


60,258,127
 
Receivable from brokers for securities sold
15,023,942



15,023,942
 
Receivable for investments sold on a delayed-delivery basis
165,128,283



165,128,283
 
Wrap contracts


54,788

54,788
 
Derivative assets
1,651,529

19,377,654


21,029,183
 
Marketable limited partnerships or corporations

2,075,152,357

1,289,559

2,076,441,916
 
Non-marketable limited partnerships


345,136,833

345,136,833
 
Investments of securities lending collateral 1

304,276,887


304,276,887
 
Total assets measured at fair value
$
1,850,958,557

$
7,006,308,000

$
653,934,853

$
9,511,201,410
 

23


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


 
Fair Value Measurements at Reporting Date Using Inputs Classified as
 
 
Level 1
Level 2
Level 3
Total
Liabilities
 
 
 
 
Payable to brokers for securities purchased
$
21,658,687

$

$

$
21,658,687

Payable for investments purchased on a delayed-delivery basis
228,516,431



228,516,431

Payable to brokers for collateral on deposit
6,067,557



6,067,557

Derivative liabilities
3,253,382

21,623,235


24,876,617

Securities sold, not yet purchased
105,637,108



105,637,108

Payable for securities lending collateral
309,681,344



309,681,344

Total liabilities measured at fair value
$
674,814,509

$
21,623,235

$

$
696,437,744


1 The balances at December 31, 2012 and December 31, 2011 were related to cash collateral received in connection with the securities lending program, the majority of which was invested in money market funds. See Note 9, "Securities Lending", for further discussion on this program.


24


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


The table below provides a summary of each of the master trust investment accounts by the fair value inputs, excluding accrued interest and dividends, cash, and administrative fees, used in the measurement as of December 31, 2012.

U.S. Large Cap Stock Fund
International Stock Fund
Global
Bond Fund
U.S. Small Cap Stock Fund
Stable
Value Fund
Alternative Investments Fund
Hedge Fund
Commodities Fund
Emerging Markets Fund
Total
Assets




















Level 1
$
618,222,981

$
764,205,776

$
1,248,394,081

$
254,247,143

$

$

$
20,537,569

$

$
345,784

$
2,905,953,334

Level 2
1,116,601,598

551,926,904

922,749,489

213,756,570

622,154,314

5,576,021

2,131,147,355

380,225,731

1,111,754,859

7,055,892,841

Level 3


288,446,012


7,050,418

478,878,481

997,232



775,372,143

Total assets measured at fair value
$
1,734,824,579

$
1,316,132,680

$
2,459,589,582

$
468,003,713

$
629,204,732

$
484,454,502

$
2,152,682,156

$
380,225,731

$
1,112,100,643

$
10,737,218,318






















Liabilities
 
 
 
 
 
 
 
 
 


Level 1
$
3,469

$
32,094,303

$
470,765,725

$
198,276,901

$

$

$

$

$
8,238

$
701,148,636

Level 2

4,173,479

13,460,042







17,633,521

Total liabilities measured at fair value
$
3,469

$
36,267,782

$
484,225,767

$
198,276,901

$

$

$

$

$
8,238

$
718,782,157


The table below provides a summary of each of the master trust investment accounts by the fair value inputs, excluding accrued interest and dividends, cash, and administrative fees, used in the measurement as of December 31, 2011. As a result of further analysis of the master trust financial instruments, approximately $20.6 million of collateralized debt obligations that were previously reported as Level 2 U.S. corporate bond investments at December 31, 2011 have been reclassified to Level 3 investments. This revision in the disclosed classification had no effect on the reported fair values of these instruments or on the Plan's financial statements.
 
U.S. Large Cap Stock Fund
International Stock Fund
Global
Bond Fund
U.S. Small Cap Stock Fund
Stable
Value Fund
Alternative Investments Fund
Hedge Fund
Commodities Fund
Emerging Markets Fund
Total
Assets
 
 
 
 
 
 
 
 
 
 
Level 1
$
483,405,183

$
621,933,056

$
499,412,189

$
234,651,658

$

$

$
11,041,676

$
178,294

$
336,501

$
1,850,958,557

Level 2
929,350,192

596,953,018

1,571,260,659

134,316,785

583,611,902

3,263,537

1,858,725,808

385,501,100

943,324,999

7,006,308,000

Level 3


294,793,411


12,715,050

345,136,833

1,289,559



653,934,853

Total assets measured at fair value
$
1,412,755,375

$
1,218,886,074

$
2,365,466,259

$
368,968,443

$
596,326,952

$
348,400,370

$
1,871,057,043

$
385,679,394

$
943,661,500

$
9,511,201,410

 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
Level 1
$

$
89,695,840

$
454,070,846

$
111,047,823

$

$

$

$

$
20,000,000

$
674,814,509

Level 2

378,342

21,244,893







21,623,235

Total liabilities measured at fair value
$

$
90,074,182

$
475,315,739

$
111,047,823

$

$

$

$

$
20,000,000

$
696,437,744


25


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


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 dividends, cash, and administrative fees, using significant unobservable inputs (Level 3) for 2012:

Fair Value Measurements Using Level 3


Mortgage-Backed Securities
Collateralized Debt Obligations
Wrap
Contracts
Marketable Limited Partnerships or Corporation
Non-Marketable Limited Partnership
Total
Net Gains
Balance as of
December 31, 2011
$
80,304,428

$
227,149,245

$
54,788

$
1,289,559

$
345,136,833


Total gains (losses) (realized and unrealized)
     
 

12,228,943

22,187,661

45,376

(292,327
)
41,634,967

$
75,804,620

     Purchases
40,237,186

70,434,516



132,107,230


     Sales
(61,883,138
)
(95,262,575
)


(40,000,549
)

Balance as of
December 31, 2012
$
70,887,419

$
224,508,847

$
100,164

$
997,232

$
478,878,481


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, 2012
$
5,022,515

$
14,172,080

$
45,376

$
(292,327
)
$
41,634,967

$
60,582,611


Changes in net assets are included in the master trust investment accounts' net investment income for the year ended December 31, 2012.

The master trust investment accounts did not have any assets or liabilities that are measured at fair value on a nonrecurring basis as of December 31, 2012 and 2011.
Fair Value Estimated Using Net Asset Value Per Share
The Plan and master trust investment accounts invest in funds that calculate net asset value per share and primarily consist of investments in funds where they co-invest with third-party investors. The investments consist of common collective trust funds, marketable limited partnerships or corporations, non-marketable limited partnership investments, and pooled separate accounts. The alternative investment funds are primarily closed-end funds, which are not eligible for redemption until a date in the future that currently cannot be determined. The liquidation of these investments is likely to occur at different times over the next 10 years.

26


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


The following table presents the Plan’s and the master trust investment accounts’ fair values, future investment commitments, and redemption conditions for investments that calculate net asset value per share as the practical expedient as of December 31, 2012:
Type
Fair Value
Future Commitments
Redemption Frequency
Redemption Notice Period
Hedge funds (a), (b)
$
2,131,667,642

NA
Monthly to annual
5 to 90 days
Commodities funds (c)
229,422,567

NA
Monthly
30 to 35 days
Alternative investment funds (d), (e), (f)
478,878,481

$
437,747,477

NA
None
Fixed-income common collective trust funds (g)
675,868,896

NA
Daily
1 to 5 days
U.S. large cap equity common collective trust funds (h)
1,116,601,598

NA
Daily
1 to 3 days
U.S. small cap equity common collective trust funds (i)
8,324,737

NA
Daily
1 to 3 days
International equity common collective trust funds (j)
502,224,761

NA
Daily
1 to 5 days
Commodities common collective trust funds (k)
150,803,164

NA
Weekly
1 to 3 days
Emerging markets common collective trust funds (l)
1,111,754,859

NA
Daily
1 to 5 days
Pooled separate accounts (m)
92,191,129

NA
Daily
3 to 5 days
Total
$
6,497,737,834

$
437,747,477




The following table presents the Plan’s and the master trust investment accounts’ fair values, future investment commitments, and redemption conditions for funds that calculate net asset value per share as the practical expedient as of December 31, 2011. Certain amounts in the prior year have been reclassified to conform to the current year presentation.
Type
Fair Value
Future Commitments
Redemption Frequency
Redemption Notice Period
Hedge funds (a), (b)
$
1,848,898,080

NA
Monthly to annual
5 to 90 days
Commodities funds (c)
227,543,836

NA
Monthly
30 to 35 days
Alternative investment funds (d), (e), (f)
345,136,833

$
315,000,000

NA
None
Fixed-income common collective trust funds (g)
763,025,601

NA
Daily
1 to 5 days
U.S. large cap equity common collective trust funds (h)
929,069,553

NA
Daily
1 to 3 days
U.S. small cap equity common collective trust funds (i)
9,916,400

NA
Daily
1 to 3 days
International equity common collective trust funds (j)
471,591,711
NA
Daily
1 to 5 days
Commodities common collective trust funds (k)
157,770,769

NA
Weekly
1 to 3 days
Emerging markets common collective trust funds (l)
943,033,053
NA
Daily
1 to 5 days
Pooled separate accounts (m)
60,258,127

NA
Daily
3 to 5 days
Total
$
5,756,243,963

$
315,000,000

 
 


27


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


(a)
 
Includes absolute return hedge funds that typically take positions in primarily publicly traded securities and derivatives. The funds generally attempt to utilize trading strategies such as relative value, event driven, and directional. The relative value strategy seeks return by capitalizing on perceived mispricing of related securities or financial instruments, and generally avoids taking a directional bias with regard to price movement of securities and markets overall. Event-driven strategy focuses on identifying and analyzing securities that can benefit from the occurrence of an extraordinary transaction or event (e.g., restructurings, takeovers, mergers, spin-offs, bankruptcy). Directional strategy takes a bias based on the price movement of securities and markets. These funds typically will include global exposure, which includes emerging markets.
(b)
 
Includes long/short equity hedge funds that typically take both long and short positions in primarily publicly traded securities. Portfolios are built based on positive and negative views on equities. These funds typically will include global exposure, which includes emerging markets.
(c)
 
The commodities funds category seeks to match the Dow Jones-UBS Commodity Index, and the Standard & Poor's Goldman Sachs Commodity Index, which are composed of futures contracts on physical commodities.
(d)
 
Includes private real estate funds that seek out value added and opportunistic real estate investments in nonpublicly traded securities. These funds typically will include global exposure, which includes emerging markets.
(e)
 
Includes private energy and natural resource funds that seek out private investments in nonpublicly traded securities that focus on areas such as hydrocarbon reserves, infrastructure, timber, mining or minerals. These funds typically will include global exposure, which includes emerging markets.
 (f)
 
Includes private equity and venture capital funds that seek out private investments in nonpublicly traded securities that include venture capital funding of exceptional growth potential enterprises, and special situations such as distressed, opportunistic, or secondary market positions. These funds typically will include global exposure, which includes emerging markets.
(g)
 
The fixed-income funds invest in short-term and long-term, high-quality government, mortgage, and corporate bonds. Some of the funds seek to replicate the performance of the Barclays Capital 1–3 Year Treasury Bond Index and Barclays Capital 1–3 Year Agency Bond Index over the long term.
(h)
 
The funds seek to match or exceed the performance of the Russell 1000 Index. The Russell 1000 Index focuses on the large- and mid-capitalization segment of the market, with approximately 90% coverage of U.S. stocks.
(i)
 
The funds seek to match or exceed the performance of the Russell 2000 Index, a free float-adjusted market capitalization index representing 2,000 small company stocks of U.S.- domiciled companies.
(j)
 
The funds seek to provide exposure to developed stocks outside the U.S., as represented by the MSCI All Country World Index, excluding the U.S.
(k)
 
The fund seeks to match the Dow Jones-USB Commodity Index, which is composed of futures contracts on physical commodities.
(l)
 
The funds seek to provide exposure to emerging market stocks outside the U.S., as represented by the MSCI EM Index, Lazard Emerging Markets Collective Trust Fund, and State Street Global Advisors EAFE Fund.
(m)
 
Pooled separate accounts include SA GICs. The initial crediting rate for SA 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 0%.

5. Investments

The Company's common stock is the only investment that represents 5% or more of the fair value of the Plan’s net assets available for benefits at December 31, 2012 and 2011. See Note 7, "Party-in-Interest Transactions."

28


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


During the year ended December 31, 2012, the Plan’s investments (including investments purchased, sold, and held during the year) appreciated (depreciated) in fair value as follows:
Net realized and unrealized appreciation (depreciation)
in fair value of investments:


Registered mutual funds
$
130,771,474

Common collective trust funds
19,253,354

Company common stock
(55,249,931
)
Net realized and unrealized appreciation in fair value of investments
$
94,774,897


6. Investment Contracts

The Stable Value Fund holds investment contracts with insurance companies and banks to provide participants with a stable return on investment and protection of principal from changes in market interest rates. BNY Mellon has discretionary authority for the purchase and sale of investments in the Stable Value Fund, subject to the general investment policies of the IPC.
The traditional GICs crediting rate is based on 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 the CDS GICs, the FMS GICs, and the PSA 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 0%. The crediting rates for the CDS GICs, the FMS GICs, and the PSA GICs 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 the CDS GICs, the FMS GICs, and the PSA GICs aim at converging the book value of the contract and the market value of the underlying assets and, therefore, will be affected by interest rate and market changes.
Certain events may limit the ability of the Stable Value Fund to transact at the 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
Changes in qualification status of the employer or the plans participating in the fund

29


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


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, CDS GICs, VS GICs, and PSA GICs use wrap contracts 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. Wrap contracts generally change the investment characteristics of underlying securities (such as corporate debt or U.S. government securities) to those of traditional GICs. The wrap contracts provide that benefit-responsive distributions for specific underlying securities may be withdrawn at the contract 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.
The investment contracts owned by the Stable Value Fund earned the following average yields:

 
Year Ended December 31
 
 
2012

 
2011

 
 
 
 
Earned by the Plan
1.96
%
 
2.37
%
Credited to participants
1.87

 
2.28


7. Party-In-Interest Transactions
Approximately 5% of the Plan’s net assets available for benefits are shares of the Company’s common stock (with fair values of $318,222,297 and $368,676,269 as of December 31, 2012 and 2011, respectively). Transactions in shares of the Company’s common stock qualify as party-in-interest transactions under the provisions of ERISA. During 2012, the Plan made purchases of the Company’s common stock of $22,046,369 and sales and distributions totaling $17,250,410.
8. Derivative Financial Instruments
The Plan, either directly or through the master trust investment accounts, invests in common collective trust funds, mutual 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. For 2012 and 2011, the Plan purchased derivatives through its investment in the Global Bond Fund and the International Stock Fund.

30


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


The Global Bond Fund and the International Stock Fund consist 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. The investment managers may also enter into master-netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master-netting arrangement may allow counterparties to settle at net value amounts owed to each other as a result of multiple, separate derivative transactions. For presentation in the net assets available for benefits of the master trust investment accounts, fair value amounts recognized for derivative instruments are not offset under master-netting arrangements. Collateral is secured against derivative instruments whenever deemed necessary. Cash collateral received is recorded as cash with a corresponding liability on the statement of net assets available for benefits of the applicable master trust investment account, and cash collateral paid is included with other receivables. Collateral received in the form of securities is not recorded as an asset or liability as the collateral cannot be repledged. Securities pledged as collateral continue to be recorded as assets on the statement of net assets available for benefits of the applicable master trust investment account. The Global Bond Fund had securities pledged as collateral for futures contracts and swap agreements totaling $5,822,074 and $5,281,500 as of December 31, 2012 and 2011, respectively. Following is a summary of the significant accounting policies associated with the use of derivatives by the Global Bond Fund and International Stock Fund.
Currency Forward Contracts
The Global Bond Fund and the International Stock Fund have investments that are denominated in foreign currencies and utilize currency forward contracts to hedge a portion of the currency exposure for these investments. Currency forward contracts are generally marked-to-market at the prevailing forward exchange rate of the underlying currencies, with the difference between contract value and market value recorded as unrealized appreciation (depreciation). When the currency forward contract is closed, the Global Bond Fund and the International Stock Fund transfer the unrealized appreciation (depreciation) to a realized gain (loss) equal to the change in the value of the currency forward contract from when it was opened to the value at the time it was closed. Sales and purchases of currency forward 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 currency forward contracts are recorded as a derivative asset if the market value of the contract has appreciated or as a derivative liability if depreciated.
Certain risks may arise upon entering into a currency forward contract from the potential inability of counterparties to meet the terms of their contracts. The Global Bond Fund and the International Stock Fund seek to control this risk by evaluating the creditworthiness of potential counterparties and establishing credit limits. Additionally, when utilizing currency forward contracts, the Global Bond Fund and the International Stock Fund give up the opportunity to profit from favorable exchange rate movements during the term of the contract.
Futures Contracts

31


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


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 exposure to the underlying instrument. Selling futures typically decreases the exposure to the underlying instrument held, or hedges the fair value of the other investments.
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, a deposit either in cash or securities in an amount (initial margin) equal to a certain percentage of the nominal value of the contract is required. Pursuant to the futures contract, there is an agreement 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.
Futures contracts involve, to varying degrees, credit and market risks. The futures contracts entered into are 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, commodity, or security.
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 of the Global

32


Intel 401(k) Savings Plan

Notes to Financial Statements (continued)


Bond Fund. 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 Global Bond Fund has entered into various derivative transactions that are considered credit derivatives. 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 provides the Global Bond Fund with flexibility in adjusting the yield curve and credit characteristics 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, 2012 and 2011:
 
Notional Value of Credit Default Swaps1
Maturity
2012
2011
 
 
 
0–5 years 
$
13,314,653

$
13,332,627

5–10 years 
2,100,000