Intel 2014 Annual Report Download - page 44

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Gains (Losses) on Equity Investments and Interest and Other
Gains (losses) on equity investments, net and interest and other, net for each period were as follows:
(In Millions) 2014 2013 2012
Gains (losses) on equity investments, net ....................................... $ 411 $ 471 $ 141
Interest and other, net ...................................................... $43$ (151) $ 94
We recognized lower net gains on equity investments in 2014 compared to 2013 due to lower gains on sales of equity
investments partially offset by higher gains on third-party merger transactions. The majority of gains on sales, net for 2014
resulted from gains on private equity sales.
We recognized higher net gains on equity investments in 2013 compared to 2012 due to higher gains on sales of equity
investments, partially offset by lower gains on third-party merger transactions. Net gains on equity investments for 2013 included
gains of $439 million on the sales of our interest in Clearwire Communications, LLC (Clearwire LLC) and our shares in Clearwire
Corporation in Q3 2013. For further information on these transactions, see “Note 5: Cash and Investments” in Part II, Item 8 of
this Form 10-K.
We recognized an interest and other net gain in 2014 compared to a net loss in 2013 due to a gain recognized on the divestiture
of our Intel Media assets in 2014. For further information, see “Note 9: Divestitures” in Part II, Item 8 of this Form 10-K.
We recognized an interest and other net loss in 2013 compared to a net gain in 2012. We recognized a net loss in 2013 due to an
increase in interest expense related to the issuance of our $6.2 billion aggregate principal amount of senior unsecured notes in
Q4 2012. Additionally, in Q2 2012 we received proceeds from an insurance claim related to the floods in Thailand.
Provision for Taxes
Our provision for taxes and effective tax rate for each period were as follows:
(Dollars in Millions) 2014 2013 2012
Income before taxes ....................................................... $ 15,801 $ 12,611 $ 14,873
Provision for taxes ......................................................... $ 4,097 $ 2,991 $ 3,868
Effective tax rate .......................................................... 25.9% 23.7% 26.0%
The U.S. R&D tax credit was reenacted in Q4 2014 retroactive for the full year. It was also reenacted in Q1 2013 retroactive to the
beginning of 2012. A substantial majority of the increase in our effective tax rate between 2014 and 2013 was driven by the
reenacted U.S. R&D tax credit in 2013 containing two years’ worth of R&D tax credits.
The majority of the decrease in our effective tax rate between 2013 and 2012 was driven by the recognition of the 2012 U.S. R&D
tax credit in Q1 2013. This was partially offset by a lower percentage of our profits generated in lower tax jurisdictions in 2013
compared to 2012.
Liquidity and Capital Resources
(Dollars in Millions)
Dec 27,
2014
Dec 28,
2013
Cash and cash equivalents, short-term investments, and trading assets ......................... $ 14,054 $ 20,087
Other long-term investments ........................................................... $ 2,023 $ 1,473
Loans receivable and other ............................................................ $ 1,285 $ 1,226
Reverse repurchase agreements with original maturities greater than approximately three months .... $ 450 $ 400
Short-term and long-term debt .......................................................... $ 13,711 $ 13,446
Temporary equity .................................................................... $ 912 $—
Debt as percentage of permanent stockholders’ equity ....................................... 24.5% 23.1%
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