Intel 2013 Annual Report Download - page 43

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38
Restructuring and Asset Impairment Charges. In response to the current business environment, during 2013,
management approved several restructuring actions including targeted workforce reductions as well as exit of
certain businesses and facilities. These actions include the wind down of our 200mm wafer fabrication facility in
Massachusetts, which we expect to cease production by the end of 2014. These targeted reductions will enable the
company to better align our resources in areas providing the greatest benefit in the changing market.
Restructuring and asset impairment charges for each period were as follows:
(In Millions) 2013 2012 2011
Employee severance and benefit arrangements $ 201 $ — $ —
Asset impairments 39 — —
Total restructuring and asset impairment charges $ 240 $ — $ —
The restructuring and asset impairment activity for 2013 was as follows:
(In Millions)
Employee
Severance and
Benefits Asset
Impairments Total
Accrued restructuring balance as of December 29, 2012 $ — $ — $ —
Additional accruals 195 39 234
Adjustments 6 — 6
Cash payments (18) — (18)
Non-cash settlements — (39) (39)
Accrued restructuring balance as of December 28, 2013 $ 183 $ — $ 183
We recorded the additional accruals and adjustments as restructuring and asset impairment charges in the
consolidated statements of income within the “all other” operating segment. The charges incurred during 2013
include $201 million related to employee severance and benefit arrangements, which impacted approximately 3,900
employees. The accrued restructuring balance as of December 28, 2013, relates to employee severance and
benefits which are expected to be paid within the next 12 months and was recorded as a current liability within
accrued compensation and benefits in the consolidated balance sheets.
We estimate that employee severance and benefit charges to date will result in gross annual savings of
approximately $400 million, which will be realized within R&D, cost of sales, and MG&A. We began to realize these
savings in Q4 2013 and expect to fully realize these savings by Q1 2015.
We may incur additional charges in the future for employee severance and benefit arrangements, as well as facility-
related or other exit activities, as we continue to align our resources to meet the needs of the business.
Amortization of Acquisition-Related Intangibles. Amortization of acquisition-related intangibles decreased by $17
million, or 6%, in 2013 compared to 2012 and increased by $48 million, or 18%, in 2012 compared to 2011. The
increase in 2012 compared to 2011 was primarily due to the full year of amortization of intangibles in 2012 related to
the acquisitions of McAfee and the WLS business of Infineon, both completed in Q1 2011. For further information,
see “Note 8: Acquisitions” and “Note 11: Identified Intangible Assets” in Part II, Item 8 of this Form 10-K.
Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)