*Not meaningful
Q3 2024 Restructuring and Impairment Charges
In the third quarter, the company made significant progress on its $10 billion cost reduction plan. The plan aims to drive operational efficiency and agility, accelerate profitable growth and create capacity for ongoing strategic investment in technology and manufacturing leadership. These initiatives include structural and operating realignment across the company, alongside reductions in headcount, operating expenses and capital expenditures. As a result of these actions, the company recognized $2.8 billion in restructuring charges in Q3 2024, $528 million of which are non-cash charges and $2.2 billion of which will be cash settled in the future.
Intel's third quarter results were also materially impacted by the following charges:
- $3.1 billion of charges, substantially all of which were recognized in cost of sales, related to non-cash impairments and the acceleration of depreciation for certain manufacturing assets, a substantial majority of which related to the Intel 7 process node, based upon an evaluation of current process technology node capacities relative to projected market demand for Intel products and services;
- $2.9 billion of non-cash charges associated with the impairment of goodwill for certain reporting units – primarily the Mobileye reporting unit – as well as certain acquired intangible assets; and
- $9.9 billion of non-cash charges related to the establishment of a valuation allowance against U.S. deferred tax assets.
The restructuring charges of $2.8 billion and the asset impairment charges, including the allowance against our deferred tax assets, and accelerated depreciation of $15.9 billion increased GAAP loss per share attributable to Intel by $3.89. The restructuring charges, impairments of goodwill and intangible assets, and deferred tax asset valuation allowance had no impact on non-GAAP loss per share attributable to Intel. The impairment charges and accelerated depreciation for certain manufacturing assets of $3.1 billion increased GAAP and non-GAAP loss per share attributable to Intel by $0.57 and $0.63 per share, respectively. These charges were not incorporated into the guidance Intel provided for the third quarter of 2024.
Business Unit Summary
In October 2022, Intel announced an internal foundry operating model, which took effect in the first quarter of 2024 and created a foundry relationship between its Intel Products business (collectively CCG, DCAI and NEX) and its Intel Foundry business (including Foundry Technology Development, Foundry Manufacturing and Supply Chain and Foundry Services, formerly IFS). The foundry operating model is designed to reshape operational dynamics and drive greater transparency, accountability, and focus on costs and efficiency. In furtherance of Intel's internal foundry operating model, Intel announced in the third quarter of 2024 its intent to establish Intel Foundry as an independent subsidiary. The company also previously announced its intent to operate Altera® as a standalone business beginning in the first quarter of 2024. Altera was previously included in DCAI's segment results. As a result of these changes, the company modified its segment reporting in the first quarter of 2024 to align to this new operating model. All prior-period segment data has been retrospectively adjusted to reflect the way the company internally receives information and manages and monitors its operating segment performance starting in fiscal year 2024. There are no changes to Intel’s consolidated financial statements for any prior periods.
Business Unit Revenue and Trends |
|
Q3 2024 |
|
vs. Q3 2023 |
|
Intel Products: |
|
|
|
|
|
Client Computing Group (CCG) |
|
$7.3 billion |
|
down |
7% |
Data Center and AI (DCAI) |
|
$3.3 billion |
|
up |
9% |
Network and Edge (NEX) |
|
$1.5 billion |
|
up |
4% |
Total Intel Products revenue |
|
$12.2 billion |
|
down |
2% |
Intel Foundry |
|
$4.4 billion |
|
down |
8% |
All other: |
|
|
|
|
|
Altera |
|
$412 million |
|
down |
44% |
Mobileye |
|
$485 million |
|
down |
8% |
| Other |
|
$142 million |
|
down |
24% |
| Total all other revenue |
|
$1,039 million |
|
down |
28% |
| Intersegment eliminations |
|
$(4.3) billion |
|
|
|
| Total net revenue |
|
$13.3 billion |
|
down |
6% |
