Risk Factors Update Summary

• Geopolitical tensions and trade barriers can significantly harm demand for products and financial results.
• Aggregate fair value of awards that vested increased from $2.0 billion to $2.7 billion.
• Failure to comply with environmental regulations may impede manufacturing expansion and result in increased costs.
• Increased competition in the industry has intensified in recent years and is expected to continue.
• Sales of $4,254 million in Client Computing and $9,013 million in Data Center and AI were added.
• Depreciation method changed, increasing useful lives of machinery and equipment from 5 to 8 years.
• Reallocation of goodwill: $393 million from DCAI to other businesses in 2023.
• Increased regulations on AI may require significant resources to comply with US and non-US rules.
• The company's investments in new businesses and technologies are inherently risky and may not always succeed.
• The company incurred R&D expenses of $17.5 billion in 2022, up from $15.2 billion in 2021.
• The acquisition of Mobileye for $10,919 million was disclosed.
• Risks related to strategic transactions, such as the failure to realize benefits or integrate acquired businesses effectively.
• Supply chain disruptions, including lead time extensions and quality issues, can negatively impact production.
• The company's Smart Capital approach to capital spending and alternative financing arrangements pose risks.
• Weighted average grant-date fair value of Stock Units increased from $45.56 to $45.78.
• The company integrated AXG into CCG and DCAI to enhance go-to-market capabilities and accelerate innovation.
• Goodwill changes: $495 million to CCG and $101 million to DCAI in 2023.
• Changes in segment reporting show revenue shifts, e.g., Client Computing revenue decreased from $15,523 to $6,266.
• Increased cyberattack volume, frequency, and sophistication pose significant cybersecurity risks.
• Inventory cost computation changed to first-in, first-out method, impacting excess capacity charges.
• Amended credit facility: Extended maturity date to March 2024 in 2023.
• Shortages of substrates and components have limited the ability to supply customer demand.
• Expected to vest value of awards increased from $153.9 billion to $172.9 billion.
• Risks associated with IP rights, including challenges in protecting and enforcing patents and trade secrets.
• The company's efforts to separate product and manufacturing sides require significant internal changes.
• Government incentives received are recognized as grants and reduce property, plant, and equipment values.
• Goodwill increased by $495 million in Client Computing and $721 million in Data Center and AI.
• Fluctuations in stock price can impact stock repurchases and long-term stockholder value.
• The company is making significant, long-term investments in R&D and manufacturing facilities.
• Segment reporting modified to align with organizational changes, focusing on growth and cost reduction.
• Risks related to security vulnerabilities in products, including cybersecurity threats and privacy risks.
• Compliance with evolving laws and regulations worldwide poses challenges and potential conflicts among jurisdictions.
• Debt issuance: Issued $11.0 billion senior notes in 2023, including a green bond issuance.
• Authorized to repurchase up to $110.0 billion of shares, with $7.2 billion repurchased in Q1 2021.
• Operating income for Data Center and AI segment decreased from ($530) to $1,288.
• Pension benefit plans: Projected benefit obligations and assets changes in 2023.
• Net revenue seasonality more consistent with historical trends in 2023 compared to 2022.
• Employee equity plans: 119 million shares available for grants in 2023.
• Currency exchange risks managed with hedging programs to protect against fluctuations.
• Share-based compensation: $3.2 billion recognized in 2023, with a tax benefit of $571 million.
• Interest rate risk managed through interest rate contracts to convert fixed-rate debt investments.