Consolidated Statements of Operations - USD ($) shares in Millions, $ in

Millions

Fiscal Period 2021 2020 2019

Net revenue 16,434 9,763 6,731
Cost of sales 8,505 5,416 3,863
Gross profit 7,929 4,347 2,868
Research and development 2,845 1,983 1,547
Marketing, general and administrative 1,448 995 750
Licensing gain (12) - (60)
Operating income 3,648 1,369 631
Interest expense (34) (47) (94)
Other income (expense), net 55 (47) (165)
Income before income taxes and equity income 3,669 1,275 372
Income tax provision (benefit) 513 (1,210) 31
Equity income in investee 6 5 -
Net income 3,162 2,490 341
Earnings per share
Basic (in usd per share) 3 2 0
Diluted (in usd per share) 3 2 0
Shares used in per share calculation
Basic (in shares) 1,213 1,184 1,091
Diluted (in shares) 1,229 1,207 1,120
 Consolidated Statements of Comprehensive Income - USD ($) $ in Millions

Fiscal Period 2021 2020 2019

Net income 3,162 2,490 341
Net change in unrealized gains (losses) on cash flow hedges (20) 17 8
Total comprehensive income 3,142 2,507 349
 Consolidated Balance Sheets - USD ($) shares in Millions, $ in Millions

Fiscal Period 2021 2020 2019

ASSETS
Current assets:
Cash and cash equivalents 2,535 1,595 1,466
Short-term investments 1,073 695 37
Accounts receivable, net 2,706 2,066 1,859
Inventories 1,955 1,399 982
Receivables from related parties 2 10 20
Prepaid expenses and other current assets 312 378 233
Total current assets 8,583 6,143 4,597
Property and equipment, net 702 641 500
Operating lease right-of-use assets 367 208 205
Goodwill 289 289 289
Investment: equity method 69 63 58
Deferred tax assets 931 1,245 22
Other non-current assets 1,478 373 357
Total assets 12,419 8,962 6,028
Current liabilities:
Accounts payable 1,321 468 988
Payables to related parties 85 78 213
Accrued liabilities 2,424 1,796 1,084
Current portion of long-term debt, net 312 - -
Other current liabilities 98 75 74
Total current liabilities 4,240 2,417 2,359
Long-term debt, net of current portion 1 330 486
Long-term operating lease liabilities 348 201 199
Other long-term liabilities 333 177 157
Commitments and Contingencies (see Notes 16 and 17)
Stockholders’ equity:
Common Stock, Value, Issued 12 12 12
Additional paid-in capital 11,069 10,544 9,963
Treasury stock (shares) 25 6 5
Treasury Stock, Value (2,130) (131) (53)
Accumulated deficit (1,451) (4,605) (7,095)
Accumulated other comprehensive income (loss) (3) 17 -
Total stockholders’ equity 7,497 5,837 2,827
Total liabilities and stockholders’ equity 12,419 8,962 6,028
 Consolidated Statements of Cash Flows - USD ($) $ in Millions

Fiscal Period 2021

Cash flows from operating activities:

Net income 3,162
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 407
Stock-based compensation 379
Amortization of debt discount and issuance costs 5
Amortization of operating lease right-of-use assets 56
Loss on debt redemption, repurchase and conversion 7
Loss on sale or disposal of property and equipment 34
Deferred income taxes 308
Increase (Decrease) in Equity Securities, FV-NI 56
Other (7)
Changes in operating assets and liabilities:
Accounts receivable, net (640)
Inventories (556)
Receivables from related parties 8
Prepaid expenses and other assets (920)
Payables to related parties 7
Accounts payable 801
Accrued liabilities and other 526
Net cash provided by operating activities 3,521
Cash flows from investing activities:
Purchases of property and equipment (301)
Payments to Acquire Short-term Investments (2,056)
Proceeds from maturity of short-term investments 1,678
Collection of deferred proceeds on sale of receivables -
Other (7)
Net cash used in investing activities (686)
Cash flows from financing activities:
Proceeds from short-term borrowings -
Repayments and extinguishment of debt -
Proceeds from Warrant Exercises -
Proceeds from sales of common stock through employee equity plans 104
Repurchases of common stock (1,762)
Common stock repurchases for tax withholding on employee equity plans (237)
Other -
Net cash (used in) provided by financing activities (1,895)
Net increase in cash and cash equivalents, and restricted cash 940
Cash, cash equivalents and restricted cash at beginning of year 1,595
Cash, cash equivalents and restricted cash at end of year 2,535
Cash paid during the year for:
Interest 25
Income taxes, net of refund 35
Non-cash investing and financing activities:
Purchases of property and equipment, accrued but not paid 72
Issuance of common stock to settle convertible debt 25
Transfer of assets for the acquisition of property and equipment 37
Issuance of treasury stock to partially settle debt -
Non-cash activities for leases:
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability 227
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents 2,535
Restricted cash included in Prepaid expense and other current assets -
Total cash, cash equivalents, and restricted cash 2,535
n Millions

2020 2019 Supplemental cash flow information (In m

Cash paid during the year for:
Interest
2,490 341 Income taxes, net of refund
Non-cash investing and financing activities:
312 222 Purchases of property and equipment, acc
274 197 Issuance of common stock to settle conver
14 30 Transfer of assets for the acqusition of
42 36 Issuance of treasury stock to partially sett
54 176 Non-cash activities for leases:
33 42 Operating lease right-of-use assets acquir
(1,223) (7) Reconciliationof cash, cash equivalents and restricted cas
2 1 Cash and cash equivalents
8 (1) Restricted cash included in Prepaid expen
Total cash, cash equivalents and restricte
(219) (623)
(417) (137)
10 14
(231) (176)
(135) 7
(513) 153
574 220
1,071 493

(294) (217)
(850) (284)
192 325
- 25
- 2
(952) (149)

200 -
200 473
- 449
85 74
- -
(78) (6)
(1) (1)
6 43
125 387
1,470 1,083
1,595 1,470

31 67
8 (4)

31 65
217 377
111 115
- 7

45 22

1,595 1,466
- 4
1,595 1,470
 December December December 28,2019

25 31 67
35 8 (4)
cing activities:
72 31 65
25 217 377
37 111 115
- - 7

227 45 22
quivalents and restricted cash
2,535 1,595 1,466
- - 4
2,535 1,595 1,470
 Consolidated Statements of Stockholders Equ

Total Common stock

Ending balance at Dec. 28, 2019 2,827 12

Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchases of common stock
Common stock issued under employee equity plans
Issuance of common stock upon warrant exercise -
Stock-based compensation
Issuance of common stock warrants
Issuance of common stock to settle convertible debt 217 -
Payment, Tax Withholding, Share-based Payment Arrangement 78
Issuance of treasury stock to partially settle debt -
Cumulative effect of adoption of accounting standard
Net income 2,490
Other comprehensive income (loss)
Ending balance at Dec. 26, 2020 5,837 12

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Repurchases of common stock
Common stock issued under employee equity plans
Issuance of common stock upon warrant exercise -
Stock-based compensation
Issuance of common stock warrants
Issuance of common stock to settle convertible debt 25 -
Payment, Tax Withholding, Share-based Payment Arrangement 237
Issuance of treasury stock to partially settle debt -
Cumulative effect of adoption of accounting standard
Net income 3,162
Other comprehensive income (loss)
Ending balance at Dec. 25, 2021 7,497 12

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Repurchases of common stock 1,800
Statements of Stockholders Equity - USD ($) $ in Millions

Additional paid-in capital Treasury stock Accumulated deficit

9,963 (53) (7,095)

-
85
-
274
5
217
(78)
- -
-
2,490

10,544 (131) (4,605)

-
104
-
379
17
25
(237)
- -
(8)
3,162

11,069 (2,130) (1,451)

(1,762)
Accumulated other comprehensive income (loss)

17
17

(20)
(3)
 T-Accounts

Assets Current
+ Cash and cash equivalents (A) -
1595
3521
1895
686
2535

+ Short-term investments (A) -

695
2056
1,678
1,073
-

+ Accounts Receivable (A) (Net) -

2,066

329
16,434
16,123
2,706

+ Inventory (A) -
1,399
8,505
Calculated purchases 9,061
1,955
-

Liabilities

- Accounts Payable (L) +

468
9,061
Calculated payments to suppliers 8,208
1321
 -

Accrued liabilities

1796
72

1868
556

Equity

- Accumulated other
comprehensive income(SE) +
17
20
(3)
-

- Paid in Capital (SE) +

10,544
104
379
17
25
11,069
-

+ Treasury stock (XSE) -

(131)
 (237)
(1,762)
(2,130)
-
 T-Accounts

Non-Current
+ PP&E (net) (A) -
641
301
72
296
37

34
19 Calculated sales/disposal of PPE
702
-

+ Goodwill (A) -
289

289
-

Operating lease
right-of-use assets
208
Calculated collections 56
227

379
(12)

Long-term debt, net

of current portion
330
312
8
25
 1
-

Long-term operating
0 lease liabilities
201
227
71
67

432
(84)

Other long-term
liabilities
177

333

+ Accumulated
deficit XSE -

4,605
8
3,162
1,451
-
NOTE 3 – Supplemental Financial Statement Information

Short-term Investments 2021 2020

Commercial paper 880 295
Time deposits 193 400
Total short-term investments 1,073 695

Accounts Receivable, net 2021 2020

As of December 25, 2021 and December 26, 2020, Accounts receivable,

net included unbilled accounts receivable of $329 million and $123
million, respectively. Unbilled accounts receivables primarily represent 329 123
work completed for development services and on custom products for
which revenue has been recognized but not yet invoiced. All unbilled
accounts receivable are expected to be billed and collected within 12
months.

Inventories 2021 2020

Raw materials 82 93
Work in process 1,676 1,139
Finished goods 197 167
Total inventories 1,955 1,399

Property and Equipment, net 2021 2020

Leasehold improvements 206 208
Equipment 1,534 1,209
Construction in progress 96 136
Property and equipment, gross 1,836 1,553
Accumulated depreciation (1,134) (912)
Total property and equipment, net 702 641

2021 2020 2019

Depreciation expense 296 217 142

Other Non-current Assets 2021 2020

Prepaid long-term supply agreements 916 -
Software and technology licenses, net 328 229
Other 234 144
Total other non-current assets 1,478 373
Accrued Liabilities 2021 2020
Accrued marketing programs 933 839
Accrued compensation and benefits 705 513
Other accrued and current liabilities 786 444
Total accrued liabilities 2424 1796

Revenue

Revenue allocated to remaining performance obligations that are

unsatisfied (or partially unsatisfied) include amounts received from
customers and amounts that will be invoiced and recognized as revenue in
future periods for development services, IP licensing and product revenue.
As of December 25, 2021, the aggregate transaction price allocated to
remaining performance obligations under contracts with an original
expected duration of more than one year was $197 million, of which $126
million is expected to be recognized in the next 12 months. The revenue
allocated to remaining performance obligations does not include amounts
which have an original expected duration of one year or less.

Revenue recognized over time associated with custom products and

development services accounted for approximately 23%, 18% and 19% of
the Company’s revenue in 2021, 2020 and 2019, respectively.

NOTE 5 – Goodwill

The carrying amount of goodwill as of December 25, 2021 and December

26, 2020 was $289 million, which was allocated to reporting units within
the
Company’s Enterprise, Embedded and Semi-Custom segment. During the
fourth quarter of 2021 and 2020, the Company conducted its annual
impairment
tests of goodwill and concluded that there was no goodwill impairment
with respect to its reporting units.

NOTE 6 – Debt and Revolving Credit Facility

Debt 2021 2020
7.50% Senior Notes Due 2022 (7.50% Notes) 312 312
2.125% Convertible Senior Notes Due 2026 (2.125% Notes) 1 26
Total debt (principal amount) 313 338
Unamortized debt discount and issuance costs 0 -8
Total debt (net) 313 330
Less: current portion of long-term debt -312 0
Total long-term debt, net of current portion 1 330
For 2021, 2020 and 2019, the Company recorded $71 million, $59 million
and $56 million, respectively, of operating lease expense, including short-
term lease
expense. For 2021 and 2020, the Company recorded $26 million and $27
million, respectively, of variable lease expense, which primarily included 2021 2020 2019
operating
expenses and property taxes associated with the usage of facilities under
the operating leases. For 2021 and 2020, cash paid for operating leases
included in
operating cash flows was $67 million and $55 million, respectively. The
Company’s finance and short-term leases are immaterial to the Company’s
consolidated
financial statements.
Record operating lease expense 71 59 56
Including short term lease expense 26 27
Cash paid for operating lease 67 55