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How to Improve Your Book Reports

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Book Reports are a great hybrid drum rudiment and are a lot of fun to play. However, they often give rudimental drummers a good deal of frustration because they can be a bit tricky to get comfortable with and master. Naturally, a common question that rudimental drummers ask is: How do I improve my Book Report rudiments? If you’re asking the same question and want to improve your Book Report rudiments, you’ve come to the right place! In this article, you’re going to learn an extremely effective method and exercise for mastering the common hybrid drum rudiment that is a blast to play!

The History the Book Report

To truly master the Book Report, you’ve got to understand the ins and outs of the rudiment of the rudiment itself. To get started, take a few minutes to check out this short documentary on the Book Report aka “Stivadiddles” and how the came to be as verified by Ralph Hardimon , Jeff Queen, Mike McIntosh, and Pete Sappadin. It’s a great story and gives you some insight of how the hybrid rudiment came to be.

As noted in the video, the rudiment has a few names including "Stivadiddles" but is most commonly known today as the Book Report. We’ll use the term “Book Report” when referring to the rudiment in this article but know that it can also be called the Stivadiddle.

The Book Report Break Down - Single Embellishment

The Book Report is made up of multiple embellishments so the best way to master it is to break it down and practice each embellishment in an isolated fashion.

To get started, take a look at the sticking of the Book Report and you’ll notice that it is built on top of Single Paradiddle sticking.  If you play a Book Report off of your right hand, the main sticking is RLRR and if you play a Book Report off of your left hand the main sticking is LRLL.

As a result, you want to make sure that you are extremely comfortable playing Single Paradiddles before learning Book Reports.  After all, if you’re having a hard time playing smooth and consistent Single Paradiddles it’s going to be extremely hard to make your Book Reports sound good!

Here are all of the single embellishments that you should practice individually:

Foundation) The first thing you want to do is practice your Single Paradiddles and make sure the underlying rhythm is smooth and consistent as you transition from single strokes to double strokes.

book reports drum

Single Embellishment 1) After you have perfected your Single Paradiddles, add a diddle on the downbeat and practice it slowly until you become comfortable and consistent with it. The key here is to make sure that your Single Paradiddle quality doesn’t change and that the diddle you add on the downbeat is nice and open.

book reports drum

Single Embellishment 2) Practice playing Single Paradiddles with flams on the “+” of the beat. Again, make sure that the quality of your Single Paradiddle doesn’t change. Allow the grace note of the flam to drop in naturally and flow with the Paradiddle. These are also known as Tutachitas.

book reports drum

Single Embellishment 3) Practice playing single accented Paradiddles with a diddle on the last partial. Again make sure that the single paradiddles are consistent and your diddle quality is great.

book reports drum

After you have practiced each step individually and feel comfortable with all of the isolated embellishments on the Single Paradiddle, it is time to practice combinations of two embellishments at a time.

The Book Report Break Down - Double Embellishment

Once you become comfortable with all of the individual aspects of the rudiment based on top of a single paradiddle, practice playing two embellishments at a time to gain a better understanding of the relationship between them. Work through the same process as above with the following combinations:

Double Embellishment 1) The first of the double embellishment breakdowns includes the diddle on the downbeat and the flam on the third partial. It's essentially a Tutachita with a diddle on the downbeat.

book reports drum

Double Embellishment 2) The second double embellishment breakdown includes the flam on the third partial of the single paradiddle and a diddle on the fourth partial. It's essentially a Tutachita with a diddle on the fourth partial.

book reports drum

Double Embellishment 3) The third double embellishment breakdown includes the both diddles on the Book Report.

book reports drum

Practice all of the single and double embellishments slowly with a metronome and make sure that you’re focusing on the rhythmic integrity of the Single Paradiddle, diddle quality, and flam quality in each. After you’ve practiced all of the embellishment variations individually, move on to the Book Report Build Up exercise below:

Book Report Build Up

Here’s a great exercise that includes all of the individual and paired Book Report embellishments. It utilizes Single Paradiddles as the check of the exercise so that you can alway return to the base of the hybrid rudiment before focusing on the next embellishment grouping.

book reports drum

Book Report Conclusion

Book Reports can be a tricky hybrid rudiment to learn and play but the reason most people struggle with them is because they never take the time to break them down. If you work on perfecting all of the individual embellishments of a Book Report and then combine them by playing through the Book Report Build Up exercise, there’s no doubt that the quality and consistency of your Book Reports will improve significantly.

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Pat McLaughlin

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2016 Video of The Week - Week 29

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Pat McLaughlin is the founder of Drumline Chops.  He graduated from the University of North Texas with a degree in music education and is currently the percussion director at West Bloomfield High School.

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The Drum School has a huge library of drum instruction books. Below are some of my favorites

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15 Drum Books for Intermediate and Advanced Drummers

I am a drum book freak.  I love drum instruction books and I always have. From the moment I discovered the idea that learning to read music would open up a world of drumming information and learning, I was hooked. BANG! The Drum School has a huge library of drum instruction books. Below are some of my favorites. These books are more appropriate for intermediate and advanced players. This list is in no particular order–it is NOT a ranked list. Note that some of these books are rare or out-of-print.

Table of Contents

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“Drum Lessons with The Greats Volume 1”

Written by John Xepoleas, this was the first book in series of two volumes, both of which are now out of print. This first book is my favorite, mostly because of the lessons that are written by Gregg Bissonette and Dave Weckl. The other drummers with lessons in the book are Peter Erskine, Steve Smith, Terry Bozzio and Kenny Aronoff. But it’s Bissontte’s and Weckl’s sections that stand out for me.

Weckl’s lesson goes over his triplet concepts which were one of the most important elements of his soloing at the beginning of his career, so it is not to be missed. Meanwhile, Gregg’s lesson explains how to use the inverted paradiddle. It’s a favorite idea of mine, and I use it often. This was the first book that I ever saw explain the usefulness of this rudimental inversion that I learned from studying with Rick Considine.

The inverted paradiddle has also been the subject of some of my articles:

  • 16 Exercises to Build Facility with Inverted Paradiddles  
  • 16-more-exercises-to-learn-build-facility-with-inverted-paradiddles

It’s hard to find these original “Lessons with the Greats” books, but there is a re-issue called “Essential Drum Lessons with The Greats” that contains Bissonette’s and Weckl’s lessons and more from both original volumes.

The original versions of this book are out of print, but there is a “best-of” book that combines Volumes 1 and 2 and it has all of my favorite stuff from the original Vol 1 discussed above. You can follow the link here if you’d like to buy this “best-of” version of the book:  https://amzn.to/4coJ53e

Dave Weckl Transcription Books

Weckl released his first drum video, “Back to Basics,” in 1988. He followed it up shortly thereafter with “The Next Step,” Both videos are great. Dave explains his technique and some great concepts for playing and learning to solo. He plays along with his “Contemporary Drummer + One” tunes from the same period and he plays some great solos.

The problem for me at the time I watched these videos was: what the hell was he actually playing? There were no transcriptions included with the original videos. That’s where these two books come in—there is one book that corresponds to each of the two videos. Pretty much everything Dave plays on the videos is transcribed note for note. Even better, the transcriptions were done by the great John Riley, so you know that you can trust their accuracy.

You can buy Back to Basics here:   https://amzn.to/3W2rDvt

and, it’s not always available, but when Amazon has a copy, you can buy The Next Step here:  https://amzn.to/3zkHYmt

book reports drum

Dennis Chambers Transcription Books

Everything that you just read about the Weckl video transcription books above? Just say “ditto” regarding the two amazing Dennis Chambers videos and corresponding transcription books that came out around the same time. “In The Pocket” and “Serious Moves” were Dennis’ drum video debuts and while Dave was playing along with his “Contemporary Drummer + One” music, Dennis plays live with the John Scofield band line-up from the late ’80s period (“Loud Jazz” and “Blue Matter”).

The grooves that Dennis plays in these videos are amazing and it’s worth the price of admission just for the transcriptions of these. However, Dennis’ soloing is great too, and it’s all transcribed. If you want insight into this seminal period of the playing of Dennis Chambers, with note for note transcriptions (again by the most trust-worthy of all transcribers–John Riley), then these two books are must-haves. Like the Weckl books, these are hard to find, but worth searching for.

In fact, last I checked, these two books were out of print. Maybe you’ll find them on ebay…

Steve Gadd “Up Close” Transcription Book

Another rarity, this book and its transcriptions were put together with Steve’s help and all of his classic ideas are transcribed here. It’s based on his first drum video, “Up Close.” If you want just one place to learn the majority of Steve’s licks, this is it. Essential.

You can get yourself a copy of this classic here:  https://amzn.to/3XK4lvH

book reports drum

“Beyond Bop Drumming”

The follow-up to John Riley’s classic, “The Art of Bop Drumming,” this book provides an in-depth look at the techniques of many important modern jazz drummers. With transcriptions of Elvin Jones, Tony Williams and others, and explorations of advanced comping ideas, this is a must-have for any drummer who is delving deeply in jazz. The comping exercises exploring three limb coordination (interaction between the snare, bass and hi-hat) are challenging and musical. The ride cymbal exercises and insight are fantastic. The Elvin Jones and Tony Williams drum solo transcriptions alone are worth the price of admission. Check this one out.

Get your copy here:   https://amzn.to/3xOEBUl

“The UnReel Drum Book”

Known by many as “The Vinnie Book,” and written by Marc Atkinson, this essential work includes transcriptions of every solo that Vinnie Colaiuta plays on the album “Unreel,” by pianist and arranger Randy Waldman. The album consists of new arrangements of film and tv music like “Mannix,” “Leave It To Beaver,” “The Jetsons,” “Hawaii-Five-O” and others. Marc Atkinson’s analysis of Vinnie’s playing is helpful and interesting, but the transcriptions of Vinnie’s drum solos are the real attraction here. There is so much good stuff in here, and it’s all written out for you, note-for-note. I have stolen so much great stuff from this book that I feel like a criminal.

You can grab your copy here:   https://amzn.to/4cGsXJZ

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“Advanced Concepts”

The late Kim Plainfield’s book is not as well-known as it should be. Filled to the brim with ideas on rudiments and technique, linear and funk, and modern interpretations of latin grooves, I’ve often gone to the book to seek inspiration for ideas or just to brush up on an idea I may have forgotten. It should definitely be in your drum book library. If you seek to move beyond rock and are not sure where to begin, check this out.

You can buy the book here:  https://amzn.to/3W2sDzJ

“Time Functioning Patterns”

The classic “Patterns” books by Gary Chaffee are great to shake things up. Of the four volumes published, I personally have found the “Time Functioning” volume to be the most useful to my playing. The other books are full of great information, but I never saw the usefulness for much of them. Since functioning as a time-keeper is our primary job as a drummer, it makes sense that this volume would be of more use.

There are many in-depth exercises on independence in rock/funk and jazz—all of which are very useful. But the real killers here are Gary’s concepts and methods of linear playing. This is the book that introduced me to linear, and the system presented for using math to create grooves has stuck with me. With this system, you can come up with grooves that sound amazing, unique, and much more difficult than they really are.

If you wanted to buy this book, it’s available at this link:  https://amzn.to/4eLao9C

book reports drum

“Future Sounds”

Since we’re on the topic of linear playing, David Garibaldi’s contribution is obviously significant. He’s written multiple books on the topic, and I’ve delved into several, but this one is my favorite. There are many exercises of useful linear grooves. I’ve found the second half of the book, with the “Groove Studies” and “Random Ideas” sections, to be the most applicable to my actual playing. If you’re going to learn to play linear, why not go to Garibaldi, the master?

If you want this book, you can buy a copy here:   https://amzn.to/3L6p4SS

“Inside Buddy Rich”

This rarity by Jim Nesbitt is my favorite instructional book about Buddy Rich’s playing. I bought it after skimming through it in NYC’s Modern Drum Shop in the ’80s and seeing how detailed the transcriptions were. According the book’s credits, it was written in collaboration with Buddy Rich himself, which means a lot. There is also insightful analysis of some of Buddy’s playing concepts. A very cool and detailed book. But, it is very rare. A few years ago, I found a copy being offered on Amazon for about $400. More recently, it was nowhere to be found.

book reports drum

“Hands, Grooves and Fills”

Pat Petrillo’s modest little book has a lot of information in it. For my money, the technique portion is the clear winner of the three sections. There is nothing wrong with the rest of the book, but the handy exercises in the technique section are a great way to work on flams, paradiddles and other rudiments. I frequently pull this book out when a student needs to get a little deeper into technique. In particular, Pat’s system for abbreviating rudiments with his own “shorthand” is interesting and helpful, particularly with paradiddles. Worth a look.

You can get your copy here:  https://amzn.to/4eMb8Lm

“Groovin’ In Clave”

Ignacio Berroa’s great book introduced me to the idea of developing independence against the clave as a cymbal rhythm (NOT left foot clave). I was attracted to this notion because of my never-ending desire to sound unique. But I also wanted to work on this because it seemed absolutely impossible. Now that I have some facility doing it, I have an increased overall confidence in my ability to learn pretty much ANYTHING. That kind of confidence is really helpful to my overall playing and thinking. So, I can tell you that anything is possible in your playing–really. If you doubt that, just work on this book. By the way, playing clave as a cymbal rhythm while playing funk (or other things) actually sounds very cool, so it meets the practical aspect for my practice time too.

Unfortunately, this book is out of print but you can check out all of my original exercises to develop this independence here:   https://bangthedrumschool.com/clave-and-latin-independence-exercises-on-pdf /

book reports drum

“Rick’s Licks”

Rick Gratton’s book of personal licks and soloing ideas is a great source for injecting new blood into your playing. If you feel uninspired or low on new ideas, “Rick’s Licks” can help you. If I want a new piece of drumming candy, or just want to check out something that I’m sure will inspire me or give me a platform for jumping off into new drumming territory, “Rick’s Licks” usually does the trick. Rick is a legendary educator and many pro drummers have studied with him. Definitely worth having in your drum book library.

You can get this book here:   https://amzn.to/4brdXin

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Trump family battles grow nastier: After Eric rips Fred’s ‘disgusting’ book, Mary takes him down

  • Updated: Aug. 02, 2024, 10:12 a.m.
  • | Published: Aug. 02, 2024, 10:10 a.m.

Mary Trump

Mary Trump, niece of former president Donald Trump, called Donald's son Eric a "weak" and "cruel" small man. (Avary Trump via AP) AP

  • Kevin Manahan | NJ Advance Media for NJ.com

Mary Trump, who has written three best-selling books about life as a Trump , says she’s tens of millions of dollars poorer because her uncle Donald, his sister and other family members pilfered her inheritance when she and her brother, Fred, were young.

Their father died when they were teenagers, and when their grandfather died in 1999, Mary and Fred learned they had been disinherited, she says. That led to a series of lawsuits and a nasty family feud that contunues to this day.

In the end, the siphoning of a $1 billion estate left by their grandfather meant that Fred’s disabled son wouldn’t get the lifelong medical care he needed, Mary said.

The story is retold in Fred’s new book, “All in the Family: The Trumps and How We Got This Way.” In the tell-all, Fred reveals that Donald Trump once cruelly suggested that Fred should simply let his son die .

The book — which follows Mary Trump’s million-copy seller about the ex-president — sparked a social media post by Eric Trump, who called Fred’s book “garbage,” and said Fred, despite “unwavering love” from Donald Trump and his family, was biting the hand that has fed him.

He also took a swipe at called Mary, calling her “troubled.”

“It’s disappointing that after decades of unwavering love, support, golf memberships, family vacations, and millions of dollars in support for his wonderful son, Fred Trump has decided to cash in less than a hundred days before an election,” Eric Trump wrote.

“I have signed the checks and witnessed firsthand as my father and our family has provided endless financial support so that Fred’s son could receive the best possible medical care to read this garbage and see that he has now followed his trouble, sister simply to earn a quick buck is disgusting, disheartening, and a prime example of no good deed goes unpunished.”

Mary Trump, however, fired back in her newsletter: You can steal our millions, spoon-feed us a few bucks and tell us to be thankful for your charity, she said. Besides, she said, Eric benefited from the theft.

“If Eric had any self-awareness, he would have kept his mouth shut,” she wrote. “If he had any sense of basic human decency, he would understand the bargain he’s made and, at the very least, not attempt to pass off a blatant theft — from which he benefited — as an act of charity.

“But he’s had very good teachers, and goes instead for the threat and the lie, while rejecting the truth and compassion, because like his father, he’s weak and he’s cruel in the way of small unaccomplished men.”

She added: “I have no doubt my uncle Donald had a hand in Eric’s statement and to him I would say, you do not get to steal tens of millions of dollars from your dead brother’s children and then, when you use some small portion of it to help out the victim of your theft, you don’t get to pretend that you deserve anyone’s gratitude.”

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Inside the two-year fight to bring charges against school librarians in Granbury, Texas

The law enforcement officer spent months methodically gathering evidence. He leafed through thousands of pages and highlighted key passages amid reams and reams of paper. He wore his body camera to record his interactions with witnesses and suspects. And he photographed what he saw as instruments of the alleged crime:

The targets of the investigation? Three school librarians in Granbury, Texas. The allegation? They had allowed children to access literature — such as “The Bluest Eye,” by Toni Morrison — that the officer, Scott London, a chief deputy constable, had deemed obscene.

In an extraordinary look into the ramifications of the right-wing backlash against books dealing with racism, gender, sex and sexuality, an 824-page investigative file obtained by NBC News and NBC 5 Dallas-Fort Worth shows how, for two years, London vigorously pursued felony charges against librarians in the Granbury Independent School District.

London secured subpoenas, filed public records requests, received names of students who’d checked out certain books and, after a year, wrote draft criminal complaints .

Senior deputy constable Scott London.

Those charges — distributing harmful material to a minor — were never filed. The investigation came to an end in June after Hood County District Attorney Ryan Sinclair turned down London’s request to indict the librarians, citing a lack of conclusive evidence to charge them with felonies.

Sinclair declined to be interviewed and did not respond to written questions. London, who has ties to the anti-government constitutional sheriff’s movement and tried to launch a local chapter of the far-right Oath Keepers militia in 2020, did not respond to questions.

NBC News is not naming the three librarians because they were never charged with a crime. None of them agreed to be interviewed. Granbury Superintendent Jeremy Glenn declined to comment. The district released a statement saying officials looked forward to putting the matter behind them.

“Granbury ISD respects the due diligence of the district attorney and wholeheartedly agrees that this investigation was without merit,” it said.

London’s investigative file offers the most detailed and visceral picture to date of an attempt to prosecute librarians amid the nationwide campaign by conservatives to restrict children’s access to books depicting sex and LGBTQ people.

As London was conducting his probe, at least 18 states considered bills to make it easier to prosecute librarians over contested books, and three — Missouri, Indiana and Arkansas — passed them into law, although Arkansas’ is on hold pending a lawsuit filed by a group of libraries . Police and sheriff’s deputies have been called by parents and right-wing activists to investigate library books in Florida , Missouri , South Carolina and elsewhere, but free speech advocates and librarian organizations say they are unaware of any librarian or school official who has been charged over books.

“It’s as if books have become contraband, and it’s just so alarming,” said Kasey Meehan, who leads a freedom to read campaign at PEN America, a free speech nonprofit.

A series of videos captured by London’s body-worn camera in May 2022 show him striding through school hallways, interviewing administrators and perusing library shelves in search of the offending books.

In one video, a middle school librarian leans over a book check-out counter, her hands folded at her mouth, as London lays out the legal basis for his investigation. On the wall behind the librarian are colorful decorations and a quote from Dr. Seuss: “The more things you read, the more things you will know.”

“There’s been an allegation of books that were in conflict of the penal code in the library,” London tells the librarian, “and so that’s what I’m looking into.”

London says he has some questions, but under the Fifth Amendment, the librarian is not obligated to answer them.

“I really don’t want to at the moment,” she says, shaking her head.

In another video, London lays out several books on a library table and photographs their covers and copyright pages — logging each as evidence of a potential crime.

Body cam footage from senior deputy constable Scott London photographing library books as part of his investigation

Adam Steinbaugh, a lawyer for the civil liberties nonprofit the Foundation for Individual Rights and Expression, or FIRE, said the Granbury investigation stands out from other cases he’s tracked. Steinbaugh obtained a copy of London’s investigative file through a public records request.

This was the first time, he said, that his organization had seen a law enforcement official issue subpoenas and receive records showing how often books had been checked out and by whom, and the first time he’d seen an officer draft criminal complaints against librarians. Watching police body camera footage of school librarians being confronted by an investigator was deeply unsettling, Steinbaugh said.

“Anytime you’re talking about arresting a librarian for the content of books in a library, that’s going to have a chilling effect,” he said. “Why be a librarian? Why take the, frankly, little pay that librarians, especially school librarians, get, and risk going to prison?”

Granbury’s battle over school library books began in early 2022. That January, Glenn, Granbury’s superintendent, directed librarians to remove books that contained descriptions of sex and LGBTQ storylines, according to a secret recording obtained by NBC News, ProPublica and The Texas Tribune. The district later appointed a panel of community volunteers to review dozens of books that a Republican state legislator had flagged as inappropriate.

In the end, the committee members voted to permanently ban just three of the titles, including “This Book Is Gay,” a coming-out guide for LGBTQ teens by transgender author Juno Dawson that includes detailed descriptions of sex, and returned the others to shelves.

The decision outraged a pair of conservative Christian parents who served on the review committee — a homeschooling mother named Monica Brown and Karen Lowery, who was later elected to Granbury’s school board.

Stills from Monica Brown's appearances at Granbury ISD school board meetings on April 25, May 16, June 2, and July 18, in Granbury, Texas.

On May 2, 2022, according to a case summary included in London’s investigative file, Brown and Lowery brought their concerns about “pornography” in school libraries to him. They filed a complaint naming 11 allegedly obscene books that they said could be found in Granbury school libraries. The titles, all of which contained passages about sex or rape, included a popular teen fantasy series by Sarah J. Maas and a pair of books by the acclaimed young adult author Tiffany D. Jackson.

The idea that school librarians had been handing out pornography in a town like Granbury — where many folks identify as conservative Christians and 80% of county residents voted for Donald Trump in 2020 — seemed far-fetched to some locals, but London committed himself to investigating.

In an interview with NBC 5 Dallas-Fort Worth that aired last year , London said the probe was simply a response to the complaint from Lowery and Brown and not driven by his own views.

“If a crime is reported to any law enforcement agency, I would expect the law enforcement agency to investigate the crime,” he said.

Lowery, however, said in an email to reporters last year that it was London who asked if she and Brown would file the complaint after he heard them speak about library books at a local Republican club.

“Monica and I agreed to do so believing we should support law enforcement,” Lowery wrote to NBC 5 Dallas-Fort Worth.

A day after taking their complaint, London made his first visits to Granbury’s administrative offices, and later that week to Granbury High School and a pair of middle schools. 

Body camera footage shows London making small talk with administrators and repeating a joke about being more of a “math guy” when he was a pupil. 

In one encounter with superintendent Glenn, on May 3, 2022, London explained his approach to the case.

“Just because I work for the government, I can’t go give a 13-year-old a Hustler magazine,” London said. “If you’re showing pictures of a vagina covered in boils, it’s part of sex ed, you can justify it. But if it’s smut for smut’s sake, it’s not justified.”

Body cam footage from senior deputy constable Scott London speaking to Granbury superintendent Jeremy Glenn on May 3, 2022.

In each of his meetings with the three librarians, London explained that they were under no obligation to speak with him. One by one, the librarians declined to answer questions.

“I’ll listen to what you have to say,” one librarian told London, laughing nervously.

“I was told not to say anything unless I have legal,” another told him.

Paul Hyde, a Granbury attorney who served on the volunteer committee tasked with reviewing dozens of school library books, said he informally advised two of the accused librarians early in London’s investigation and saw the toll it has taken on them. 

“These women, that are amazing educators and librarians, have been terrified for over two years now that they’re going to get arrested, hauled off to jail on a felony charge of providing pornography to minors,” Hyde said, noting that one of the librarians left the district as a result. 

“We lost a great librarian,” he said.

Body cam footage from senior deputy constable Scott London photographing library books

As the investigation progressed, London reviewed nearly 200 pages of community member complaints about books available in the Granbury district, many of which cited BookLooks , a website tied to the conservative activist group Moms for Liberty. 

He reported purchasing each of the 11 titles named in Lowery and Brown’s police report and, over the course of a few months in 2022, read them in their entirety. His investigative file included more than 120 photos of passages he believed to be obscene, with highlights he made with a marker.

London also secured subpoenas for Follett School Solutions, an education software company that Granbury uses to help manage its library collection, to obtain records for the dates and times that several titles were checked out from campus libraries.

Some of the records in London's investigative file included the names of students who had most recently checked out the books — a clear violation of student privacy, according to First Amendment experts. It is not clear who provided those records to London. 

A Follett spokesperson said in an email, “At no time did Follett provide any data that included student names or other student information.” 

London also sought records from the district about student volunteers who helped librarians return books to shelves. According to the case records, London believed that if he could prove that librarians used minors in the commission of the alleged crimes, it would elevate the charges from misdemeanors to felonies.

After investigating for more than a year, in July 2023, London submitted the case file to Sinclair, the district attorney. By then, London had launched a campaign for Hood County sheriff — an election he would ultimately lose.

He included in his report to Sinclair drafts of criminal complaints to charge the librarians with distributing harmful material to minors, citing sections of books in which sexual acts were described.

London named six books from Brown and Lowery’s original list that he deemed worthy of charges: 

  • Three titles from the fantasy series “A Court of Thorns and Roses” by Sarah J. Maas, which include descriptions of sexual encounters. 
  • “Gone,” a book about the consequences of an inappropriate sexual relationship between a 17-year-old and his teacher, by Kathleen Jeffrie Johnson. 
  • “Fade,” a title by Lisa McMann in which a teen with supernatural abilities investigates sexual predators at a high school. 
  • And “The Bluest Eye,” by Toni Morrison, a book about a Black girl in the 1940s who internalizes the notion that whiteness is the standard for beauty and whose struggles are exacerbated by rape and abuse.

Nearly one year later, Sinclair notified London that his office wasn’t going to prosecute the case, according to an email exchange last month between London and Sinclair that was included in the investigative file. (The documents released to NBC News and NBC 5 Dallas-Fort Worth did not include a copy of Sinclair’s letter declining to file charges, which London said was exempt from disclosure, but they did include follow-up emails describing the prosecutor’s decision and reasoning.)

Sinclair rejected the felony case because there was insufficient evidence to prove that the librarians used minors to “distribute, exhibit, or display harmful materials,” according to the emails. And at that point, the two-year statute of limitations had expired for misdemeanor charges.

Based on London’s reply, it seemed Sinclair also was not convinced that the books, taken as a whole, met the state’s legal definition of harmful material .

On May 1, London made a final plea to get Sinclair to indict the librarians.

“After reading each of these books personally in their entirety,” London wrote in a letter included in the investigative file, “I cannot fathom any scientific, educational, governmental, or other similar justifications for some of these books.”

Ultimately, Sinclair was not persuaded.

On June 24, London wrote to Glenn, letting the Granbury superintendent know that it was official: His two-year effort to charge school librarians had ended.

Brown, one of the mothers who filed the complaint, did not respond to messages requesting comment. Lowery, who continues to serve on Granbury’s school board, responded to the case’s dismissal by defending her efforts to restrict library books.

“I did what I believe I was called to do to make the community aware of this dangerous issue,” she said in a statement.

Karen Lowrey speaks at a Granbury ISD School Board Meeting on April 25, 2022.

Deborah Caldwell-Stone, director of the American Library Association’s Office for Intellectual Freedom, said the case demonstrates the risks librarians now face and the importance of prosecutorial restraint.

“We do cling to the fact that no prosecutor has accepted this information to create a criminal prosecution,” Caldwell-Stone said. “We’re just concerned that someday someone might choose to do it.”

UPDATE  (July 25, 2024, 2:00 p.m. ET): This article has been updated to reflect that it is not clear who provided London with records that included the names of students who had checked out library books, and to add Follett School Solutions’ statement that it had not provided data including student names.

book reports drum

Mike Hixenbaugh is a senior investigative reporter for NBC News, based in Maryland, and author of "They Came for the Schools."

book reports drum

Tyler Kingkade is a national reporter for NBC News, based in Los Angeles.

Scott Friedman leads the Investigations team at KXAS-TV in Dallas/Fort Worth, specializing in stories that expose critical safety concerns.

Press Releases

Intel reports second-quarter 2024 financial results; announces $10 billion cost reduction plan to increase efficiency and market competitiveness, related documents.

NEWS SUMMARY

  • Second-quarter revenue of $12.8 billion, down 1% year over year (YoY).
  • Second-quarter GAAP earnings (loss) per share (EPS) attributable to Intel was $(0.38); non-GAAP EPS attributable to Intel was $0.02.
  • Forecasting third-quarter 2024 revenue of $12.5 billion to $13.5 billion; expecting third-quarter GAAP EPS attributable to Intel of $(0.24); non-GAAP EPS attributable to Intel of $(0.03).
  • Implementing comprehensive reduction in spending, including a more than 15% headcount reduction, to resize and refocus.
  • Suspending dividend starting in the fourth quarter of 2024. The company reiterates its long-term commitment to a competitive dividend as cash flows improve to sustainably higher levels.
  • Achieved key milestones on Intel 18A with the 1.0 Process Design Kit (PDK) released and key power-on of first client and server products on Intel 18A, Panther Lake and Clearwater Forest.

SANTA CLARA, Calif.--(BUSINESS WIRE)-- Intel Corporation today reported second-quarter 2024 financial results.

“Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones. Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating our IDM 2.0 transformation,” said Pat Gelsinger, Intel CEO. “These actions, combined with the launch of Intel 18A next year to regain process technology leadership, will strengthen our position in the market, improve our profitability and create shareholder value.”

“Second-quarter results were impacted by gross margin headwinds from the accelerated ramp of our AI PC product, higher than typical charges related to non-core businesses and the impact from unused capacity,” said David Zinsner, Intel CFO. “By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet. We expect these actions to meaningfully improve liquidity and reduce our debt balance while enabling us to make the right investments to drive long-term value for shareholders.”

Cost-Reduction Plan

As Intel nears the completion of rebuilding a sustainable engine of process technology leadership, it announced a series of initiatives to create a sustainable financial engine that accelerates profitable growth, enables further operational efficiency and agility, and creates capacity for ongoing strategic investment in technology and manufacturing leadership. These initiatives follow the establishment of separate financial reporting for Intel Products and Intel Foundry, which provides a "clean sheet" view of the business and has uncovered significant opportunities to drive meaningful operational and cost efficiencies. The actions include structural and operating realignment across the company, headcount reductions, and operating expense and capital expenditure reductions of more than $10 billion in 2025 compared to previous estimates. As a result of these actions, Intel aims to achieve clear line of sight toward a sustainable business model with the ongoing financial resources and liquidity needed to support the company’s long-term strategy.

The plan will enable the next phase of the company’s multiyear transformation strategy, and is focused on four key priorities:

  • Reducing Operating Expenses: The company will streamline its operations and meaningfully cut spending and headcount, reducing non-GAAP R&D and marketing, general and administrative (MG&A) to approximately $20 billion in 2024 and approximately $17.5 billion in 2025, with further reductions expected in 2026. Intel expects to reduce headcount by greater than 15% with the majority completed by the end of 2024.
  • Reducing Capital Expenditures: With the end of its historic five-nodes-in-four-years journey firmly in sight, Intel is now shifting its focus toward capital efficiency and investment levels aligned to market requirements. This will reduce gross capital expenditures* in 2024 by more than 20% from prior projections, bringing gross capital expenditures in 2024 to between $25 billion and $27 billion. Intel expects net capital spending* in 2024 of between $11 billion and $13 billion. In 2025, the company is targeting gross capital expenditures between $20 billion and $23 billion and net capital spending between $12 billion and $14 billion.
  • Reducing Cost of Sales: The company expects to generate $1 billion in savings in non-variable cost of sales in 2025. Product mix will continue to be a headwind next year, contributing to modest YoY improvements to 2025's gross margin.
  • Maintaining Core Investments to Execute Strategy: The company continues to advance its long-term innovation and path to leadership across process technology and products, and the increased efficiency from its actions is expected to further support its execution. In addition, Intel continues to sustain investments to build a resilient and sustainable semiconductor supply chain in the United States and around the world.

Intel is taking the added step of suspending the dividend starting in the fourth quarter, recognizing the importance of prioritizing liquidity to support the investments needed to execute its strategy. The company reiterates its long-term commitment to a competitive dividend as cash flows improve to sustainably higher levels.

Q2 2024 Financial Highlights

 

 

Revenue ($B)

$12.8

$12.9

down 1%

 

 

 

Gross Margin

35.4%

35.8%

down 0.4 ppt

38.7%

39.8%

down 1.1 ppts

R&D and MG&A ($B)

$5.6

$5.5

up 2%

$4.9

$4.7

up 5%

Operating Margin

(15.3)%

(7.8)%

down 7.5 ppts

0.2%

3.5%

down 3.3 ppts

Tax Rate

17.5%

280.5%

n/m**

13.0%

13.0%

Net Income (loss) Attributable to Intel ($B)

$(1.6)

$1.5

n/m**

$0.1

$0.5

down 85%

Earnings (loss) Per Share Attributable to Intel

$(0.38)

$0.35

n/m**

$0.02

$0.13

down 85%

In the second quarter, the company generated $2.3 billion in cash from operations and paid dividends of $0.5 billion.

 

Business Unit Summary

Intel previously announced the implementation of 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 a key component of the company's strategy and is designed to reshape operational dynamics and drive greater transparency, accountability, and focus on costs and efficiency. 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.

Intel Products:

 

 

Client Computing Group (CCG)

$7.4 billion

up 9%

Data Center and AI (DCAI)

$3.0 billion

down 3%

Network and Edge (NEX)

$1.3 billion

down 1%

Total Intel Products revenue

$11.8 billion

up 4%

Intel Foundry

$4.3 billion

up 4%

All other:

 

 

Altera

$361 million

down 57%

Mobileye

$440 million

down 3%

Other

$167 million

up 43%

Total all other revenue

$968 million

down 32%

Intersegment eliminations

$(4.3) billion

 

Total net revenue

$12.8 billion

down 1%

Intel Products Highlights

  • CCG: Intel continues to define and drive the AI PC category, shipping more than 15 million AI PCs since December 2023, far more than all of Intel's competitors combined, and on track to ship more than 40 million AI PCs by year-end. Lunar Lake, the company’s next-generation AI CPU, achieved production release in July 2024, ahead of schedule, with shipments starting in the third quarter. Lunar Lake will power over 80 new Copilot+ PCs across more than 20 OEMs.
  • DCAI: More than 130 million Intel ® Xeon ® processors power data centers around the world today, and at Computex Intel introduced its next-generation Intel ® Xeon ® 6 processor with Efficient-cores (E-cores), code-named Sierra Forest, marking the company’s first Intel 3 server product architected for high-density, scale-out workloads. Intel expects Intel ® Xeon ® 6 processors with Performance-cores (P-cores), code-named Granite Rapids, to begin shipping in the third quarter of 2024. The Intel ® Gaudi ® 3 AI accelerator is also on track to launch in the third quarter and is expected to deliver roughly two-times the performance per dollar on both inference and training versus the leading competitor.
  • NEX: Intel announced an array of AI-optimized scale-out Ethernet solutions, including the Intel AI network interface card and foundry chiplets that will launch next year. New infrastructure processing unit (IPU) adaptors for the enterprise are now broadly available and supported by Dell Technologies, Red Hat and others. IPUs will play an increasingly important role in Intel’s accelerator portfolio, which the company expects will help drive AI data center growth and profitability in 2025 and beyond. Additionally, Intel and others announced the creation of the Ultra Accelerator Link, a new industry standard dedicated to advancing high-speed, low-latency communication for scale-up AI systems communication in data centers.

Intel Foundry Highlights

  • Intel is nearing the completion of its promised five-nodes-in-four-years strategy, with Intel 18A on track to be manufacturing-ready by the end of this year and production wafer start volumes in the first half of 2025. In July 2024, Intel released to foundry customers the 1.0 PDK for Intel 18A. The company’s first two Intel 18A products, Panther Lake for client — the first microprocessor to use RibbonFet, PowerVia and advanced packaging — and Clearwater Forest for servers, are on track to launch in 2025.
  • Ansys, Cadence, Siemens, and Synopsys announced the availability of reference flows for Intel’s embedded multi-die interconnect bridge (EMIB) advanced packaging technology, which simplifies the design process and offers design flexibility. The companies also declared readiness for Intel 18A designs.
  • During the quarter, Intel named industry veteran Kevin O'Buckley to lead Foundry Services. The company also recently appointed Dr. Naga Chandrasekaran to lead Intel Foundry Manufacturing and Supply Chain. Their leadership will support Intel’s continued development of the first systems foundry for the AI era.

Other Highlights

Intel announced its second Semiconductor Co-Investment Program (SCIP) agreement, the formation of a joint venture with Apollo related to Intel’s Fab 34 in Ireland. SCIP is an element of Intel’s Smart Capital strategy, a funding approach designed to create financial flexibility to accelerate the company’s strategy, including investing in its global manufacturing operations, while maintaining a strong balance sheet.

Q3 2024 Dividend

The company announced that its board of directors has declared a quarterly dividend of $0.125 per share on the company’s common stock, which will be payable Sept. 1, 2024, to shareholders of record as of Aug. 7, 2024.

As noted earlier, Intel is suspending the dividend starting in the fourth quarter.

Business Outlook

Intel's guidance for the third quarter of 2024 includes both GAAP and non-GAAP estimates as follows:

 

 

Revenue

 

$12.5-13.5 billion

 

 

Gross Margin

 

34.5%

 

38.0%

Tax Rate

 

34%

 

13%

Earnings (Loss) Per Share Attributable to Intel—Diluted

 

$(0.24)

 

$(0.03)

Reconciliations between GAAP and non-GAAP financial measures are included below. Actual results may differ materially from Intel’s business outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below. The gross margin and EPS outlook are based on the mid-point of the revenue range.

Earnings Webcast

Intel will hold a public webcast at 2 p.m. PDT today to discuss the results for its second quarter of 2024. The live public webcast can be accessed on Intel's Investor Relations website at www.intc.com . The corresponding earnings presentation and webcast replay will also be available on the site.

Forward-Looking Statements

This release contains forward-looking statements that involve a number of risks and uncertainties. Words such as "accelerate", "achieve", "aim", "ambitions", "anticipate", "believe", "committed", "continue", "could", "designed", "estimate", "expect", "forecast", "future", "goals", "grow", "guidance", "intend", "likely", "may", "might", "milestones", "next generation", "objective", "on track", "opportunity", "outlook", "pending", "plan", "position", "possible", "potential", "predict", "progress", "ramp", "roadmap", "seek", "should", "strive", "targets", "to be", "upcoming", "will", "would", and variations of such words and similar expressions are intended to identify such forward-looking statements, which may include statements regarding:

  • our business plans and strategy and anticipated benefits therefrom, including with respect to our IDM 2.0 strategy, Smart Capital strategy, partnerships with Apollo and Brookfield, internal foundry model, updated reporting structure, and AI strategy;
  • projections of our future financial performance, including future revenue, gross margins, capital expenditures, and cash flows;
  • projected costs and yield trends;
  • future cash requirements, the availability, uses, sufficiency, and cost of capital resources, and sources of funding, including for future capital and R&D investments and for returns to stockholders, such as stock repurchases and dividends, and credit ratings expectations;
  • future products, services, and technologies, and the expected goals, timeline, ramps, progress, availability, production, regulation, and benefits of such products, services, and technologies, including future process nodes and packaging technology, product roadmaps, schedules, future product architectures, expectations regarding process performance, per-watt parity, and metrics, and expectations regarding product and process leadership;
  • investment plans and impacts of investment plans, including in the US and abroad;
  • internal and external manufacturing plans, including future internal manufacturing volumes, manufacturing expansion plans and the financing therefor, and external foundry usage;
  • future production capacity and product supply;
  • supply expectations, including regarding constraints, limitations, pricing, and industry shortages;
  • plans and goals related to Intel's foundry business, including with respect to anticipated customers, future manufacturing capacity and service, technology, and IP offerings;
  • expected timing and impact of acquisitions, divestitures, and other significant transactions, including the sale of our NAND memory business;
  • expected completion and impacts of restructuring activities and cost-saving or efficiency initiatives;
  • future social and environmental performance goals, measures, strategies, and results;
  • our anticipated growth, future market share, and trends in our businesses and operations;
  • projected growth and trends in markets relevant to our businesses;
  • anticipated trends and impacts related to industry component, substrate, and foundry capacity utilization, shortages, and constraints;
  • expectations regarding government incentives;
  • future technology trends and developments, such as AI;
  • future macro environmental and economic conditions;
  • geopolitical tensions and conflicts and their potential impact on our business;
  • tax- and accounting-related expectations;
  • expectations regarding our relationships with certain sanctioned parties; and
  • other characterizations of future events or circumstances.

Such statements involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied, including those associated with:

  • the high level of competition and rapid technological change in our industry;
  • the significant long-term and inherently risky investments we are making in R&D and manufacturing facilities that may not realize a favorable return;
  • the complexities and uncertainties in developing and implementing new semiconductor products and manufacturing process technologies;
  • our ability to time and scale our capital investments appropriately and successfully secure favorable alternative financing arrangements and government grants;
  • implementing new business strategies and investing in new businesses and technologies;
  • changes in demand for our products;
  • macroeconomic conditions and geopolitical tensions and conflicts, including geopolitical and trade tensions between the US and China, the impacts of Russia's war on Ukraine, tensions and conflict affecting Israel and the Middle East, and rising tensions between mainland China and Taiwan;
  • the evolving market for products with AI capabilities;
  • our complex global supply chain, including from disruptions, delays, trade tensions and conflicts, or shortages;
  • product defects, errata and other product issues, particularly as we develop next-generation products and implement next-generation manufacturing process technologies;
  • potential security vulnerabilities in our products;
  • increasing and evolving cybersecurity threats and privacy risks;
  • IP risks including related litigation and regulatory proceedings;
  • the need to attract, retain, and motivate key talent;
  • strategic transactions and investments;
  • sales-related risks, including customer concentration and the use of distributors and other third parties;
  • our significantly reduced return of capital in recent years;
  • our debt obligations and our ability to access sources of capital;
  • complex and evolving laws and regulations across many jurisdictions;
  • fluctuations in currency exchange rates;
  • changes in our effective tax rate;
  • catastrophic events;
  • environmental, health, safety, and product regulations;
  • our initiatives and new legal requirements with respect to corporate responsibility matters; and
  • other risks and uncertainties described in this release, our 2023 Form 10-K, and our other filings with the SEC.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this release and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business.

Unless specifically indicated otherwise, the forward-looking statements in this release do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that have not been completed as of the date of this filing. In addition, the forward-looking statements in this release are based on management's expectations as of the date of this release, unless an earlier date is specified, including expectations based on third-party information and projections that management believes to be reputable. We do not undertake, and expressly disclaim any duty, to update such statements, whether as a result of new information, new developments, or otherwise, except to the extent that disclosure may be required by law.

About Intel

Intel (Nasdaq: INTC) is an industry leader, creating world-changing technology that enables global progress and enriches lives. Inspired by Moore’s Law, we continuously work to advance the design and manufacturing of semiconductors to help address our customers’ greatest challenges. By embedding intelligence in the cloud, network, edge and every kind of computing device, we unleash the potential of data to transform business and society for the better. To learn more about Intel’s innovations, go to newsroom.intel.com and intel.com.

© Intel Corporation. Intel, the Intel logo, and other Intel marks are trademarks of Intel Corporation or its subsidiaries. Other names and brands may be claimed as the property of others.

Intel Corporation

Consolidated Condensed Statements of Income and Other Information

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

8,286

 

 

 

8,311

 

 

 

 

 

 

 

Research and development

 

 

4,239

 

 

 

4,080

 

Marketing, general, and administrative

 

 

1,329

 

 

 

1,374

 

Restructuring and other charges

 

 

943

 

 

 

200

 

 

 

 

 

 

 

 

 

 

 

Gains (losses) on equity investments, net

 

 

(120

)

 

 

(24

)

Interest and other, net

 

 

80

 

 

 

224

 

 

 

 

 

Provision for (benefit from) taxes

 

 

(350

)

 

 

(2,289

)

 

 

 

 

 

Less: Net income (loss) attributable to non-controlling interests

 

 

(44

)

 

 

(8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dilutive effect of employee equity incentive plans

 

 

 

 

 

14

 

 

 

 

 

 

 

 

 

 

Employees

 

 

 

Intel

116.5

116.4

118.1

Mobileye and other subsidiaries

5.3

5.2

4.7

NAND

3.5

3.6

4.0

Total Intel

Employees of the NAND memory business, which we divested to SK hynix on completion of the first closing on December 29, 2021 and fully deconsolidated in Q1 2022. Upon completion of the second closing of the divestiture, which remains pending and subject to closing conditions, the NAND employees will be excluded from the total Intel employee number.

Intel Corporation

Consolidated Condensed Balance Sheets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

11,287

 

 

$

7,079

 

Short-term investments

 

 

17,986

 

 

 

17,955

 

Accounts receivable, net

 

 

3,131

 

 

 

3,402

 

Inventories

 

 

 

 

Raw materials

 

 

1,284

 

 

 

1,166

 

Work in process

 

 

6,294

 

 

 

6,203

 

Finished goods

 

 

3,666

 

 

 

3,758

 

 

 

 

 

 

 

 

Other current assets

 

 

7,181

 

 

 

3,706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Short-term debt

 

$

4,695

 

 

$

2,288

 

Accounts payable

 

 

9,618

 

 

 

8,578

 

Accrued compensation and benefits

 

 

2,651

 

 

 

3,655

 

Income taxes payable

 

 

1,856

 

 

 

1,107

 

Other accrued liabilities

 

 

13,207

 

 

 

12,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

Common stock and capital in excess of par value, 4,276 issued and outstanding (4,228 issued and outstanding as of December 30, 2023)

 

 

49,763

 

 

 

36,649

 

Accumulated other comprehensive income (loss)

 

 

(696

)

 

 

(215

)

Retained earnings

 

 

66,162

 

 

 

69,156

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intel Corporation

Consolidated Condensed Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows provided by (used for) operating activities:

 

 

 

 

Net income (loss)

 

 

(2,091

)

 

 

(1,295

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

Depreciation

 

 

4,403

 

 

 

3,733

 

Share-based compensation

 

 

1,959

 

 

 

1,661

 

Restructuring and other charges

 

 

1,291

 

 

 

255

 

Amortization of intangibles

 

 

717

 

 

 

909

 

(Gains) losses on equity investments, net

 

 

(84

)

 

 

(146

)

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

 

272

 

 

 

1,137

 

Inventories

 

 

(116

)

 

 

1,240

 

Accounts payable

 

 

184

 

 

 

(1,102

)

Accrued compensation and benefits

 

 

(1,309

)

 

 

(1,340

)

Income taxes

 

 

(2,174

)

 

 

(2,186

)

Other assets and liabilities

 

 

(1,983

)

 

 

(1,843

)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows provided by (used for) investing activities:

 

 

 

 

Additions to property, plant, and equipment

 

 

(11,652

)

 

 

(13,301

)

Proceeds from capital-related government incentives

 

 

699

 

 

 

49

 

Purchases of short-term investments

 

 

(17,634

)

 

 

(25,696

)

Maturities and sales of short-term investments

 

 

17,214

 

 

 

26,957

 

Other investing

 

 

(355

)

 

 

662

 

 

 

 

 

Cash flows provided by (used for) financing activities:

 

 

 

 

Issuance of commercial paper, net of issuance costs

 

 

5,804

 

 

 

 

Repayment of commercial paper

 

 

(2,609

)

 

 

(3,944

)

Payments on finance leases

 

 

 

 

 

(96

)

Partner contributions

 

 

11,861

 

 

 

834

 

Proceeds from sales of subsidiary shares

 

 

 

 

 

1,573

 

Issuance of long-term debt, net of issuance costs

 

 

2,975

 

 

 

10,968

 

Repayment of debt

 

 

(2,288

)

 

 

 

Proceeds from sales of common stock through employee equity incentive plans

 

 

631

 

 

 

665

 

Payment of dividends to stockholders

 

 

(1,063

)

 

 

(2,036

)

Other financing

 

 

(444

)

 

 

(453

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intel Corporation

Supplemental Operating Segment Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Desktop

 

$

2,527

 

 

$

2,370

 

Notebook

 

 

4,480

 

 

 

3,896

 

Other

 

 

403

 

 

 

514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Altera

 

 

361

 

 

 

848

 

Mobileye

 

 

440

 

 

 

454

 

Other

 

 

167

 

 

 

117

 

 

 

 

 

 

 

 

 

 

 

Intersegment eliminations

 

 

(4,254

)

 

 

(3,941

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Altera

 

 

(25

)

 

 

346

 

Mobileye

 

 

72

 

 

 

129

 

Other

 

 

(82

)

 

 

(120

)

 

 

 

 

 

 

 

 

 

Intersegment eliminations

 

 

(291

)

 

 

(413

)

Corporate unallocated expenses

 

 

(1,720

)

 

 

(1,608

)

 

 

For information about our operating segments, including the nature of segment revenues and expenses, and a reconciliation of our operating segment revenue and operating income (loss) to our consolidated results, refer to our Form 10-K filed on January 26, 2024, Form 8-K furnished on April 2, 2024 and 10-Q filed on August 1, 2024.

Intel Corporation Explanation of Non-GAAP Measures

In addition to disclosing financial results in accordance with US GAAP, this document contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance. Some of these non-GAAP financial measures are used in our performance-based RSUs and our cash bonus plans.

Our non-GAAP financial measures reflect adjustments based on one or more of the following items, as well as the related income tax effects. Income tax effects are calculated using a fixed long-term projected tax rate of 13% across all adjustments. We project this long-term non-GAAP tax rate on at least an annual basis using a five-year non-GAAP financial projection that excludes the income tax effects of each adjustment. The projected non-GAAP tax rate also considers factors such as our tax structure, our tax positions in various jurisdictions, and key legislation in significant jurisdictions where we operate. This long-term non-GAAP tax rate may be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or changes to our strategy or business operations. Management uses this non-GAAP tax rate in managing internal short- and long-term operating plans and in evaluating our performance; we believe this approach facilitates comparison of our operating results and provides useful evaluation of our current operating performance.

Our non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP, and the financial results calculated in accordance with US GAAP and reconciliations from these results should be carefully evaluated.

Acquisition-related adjustments

Amortization of acquisition-related intangible assets consists of amortization of intangible assets such as developed technology, brands, and customer relationships acquired in connection with business combinations. Charges related to the amortization of these intangibles are recorded within both cost of sales and MG&A in our US GAAP financial statements. Amortization charges are recorded over the estimated useful life of the related acquired intangible asset, and thus are generally recorded over multiple years.

 

We exclude amortization charges for our acquisition-related intangible assets for purposes of calculating certain non-GAAP measures because these charges are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. These adjustments facilitate a useful evaluation of our current operating performance and comparison to our past operating performance and provide investors with additional means to evaluate cost and expense trends.

 

Share-based compensation

Share-based compensation consists of charges related to our employee equity incentive plans.

We exclude charges related to share-based compensation for purposes of calculating certain non-GAAP measures because we believe these adjustments provide comparability to peer company results and because these charges are not viewed by management as part of our core operating performance. We believe these adjustments provide investors with a useful view, through the eyes of management, of our core business model, how management currently evaluates core operational performance, and additional means to evaluate expense trends, including in comparison to other peer companies.

 

Restructuring and other charges

Restructuring charges are costs associated with a restructuring plan and are primarily related to employee severance and benefit arrangements. Other charges include periodic goodwill and asset impairments, and costs associated with restructuring activity. Q2 2024 includes a charge arising out of the R2 litigation.

We exclude restructuring and other charges, including any adjustments to charges recorded in prior periods, for purposes of calculating certain non-GAAP measures because these costs do not reflect our core operating performance. These adjustments facilitate a useful evaluation of our core operating performance and comparisons to past operating results and provide investors with additional means to evaluate expense trends.

 

(Gains) losses on equity investments, net

(Gains) losses on equity investments, net consists of ongoing mark-to-market adjustments on marketable equity securities, observable price adjustments on non-marketable equity securities, related impairment charges, and the sale of equity investments and other.

 

We exclude these non-operating gains and losses for purposes of calculating certain non-GAAP measures because it provides comparability between periods. The exclusion reflects how management evaluates the core operations of the business.

 

(Gains) losses from divestiture

(Gains) losses are recognized at the close of a divestiture, or over a specified deferral period when deferred consideration is received at the time of closing. Based on our ongoing obligation under the NAND wafer manufacturing and sale agreement entered into in connection with the first closing of the sale of our NAND memory business on December 29, 2021, a portion of the initial closing consideration was deferred and will be recognized between first and second closing.

 

We exclude gains or losses resulting from divestitures for purposes of calculating certain non-GAAP measures because they do not reflect our current operating performance. These adjustments facilitate a useful evaluation of our current operating performance and comparisons to past operating results.

Adjusted free cash flow

We reference a non-GAAP financial measure of adjusted free cash flow, which is used by management when assessing our sources of liquidity, capital resources, and quality of earnings. Adjusted free cash flow is operating cash flow adjusted for (1) additions to property, plant, and equipment, net of proceeds from capital-related government incentives and partner contributions, and (2) payments on finance leases.

 

This non-GAAP financial measure is helpful in understanding our capital requirements and sources of liquidity by providing an additional means to evaluate the cash flow trends of our business.

Net capital spending

We reference a non-GAAP financial measure of net capital spending, which is additions to property, plant, and equipment, net of proceeds from capital-related government incentives and partner contributions.

We believe this measure provides investors with useful supplemental information about our capital investment activities and capital offsets, and allows for greater transparency with respect to a key metric used by management in operating our business and measuring our performance.

 

Intel Corporation Supplemental Reconciliations of GAAP Actuals to Non-GAAP Actuals

Set forth below are reconciliations of the non-GAAP financial measure to the most directly comparable US GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP, and the reconciliations from US GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustments made to the comparable US GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

 

 

 

Acquisition-related adjustments

 

224

 

 

306

 

Share-based compensation

 

195

 

 

210

 

 

 

 

 

Acquisition-related adjustments

 

1.7

%

 

2.4

%

Share-based compensation

 

1.5

%

 

1.6

%

 

 

 

 

Acquisition-related adjustments

 

(41

)

 

(44

)

Share-based compensation

 

(585

)

 

(712

)

 

 

Acquisition-related adjustments

 

265

 

 

350

 

Share-based compensation

 

780

 

 

922

 

Restructuring and other charges

 

943

 

 

200

 

 

 

 

 

Acquisition-related adjustments

 

2.1

%

 

2.7

%

Share-based compensation

 

6.1

%

 

7.1

%

Restructuring and other charges

 

7.3

%

 

1.5

%

 

 

 

 

Income tax effects

 

(4.5

)%

 

(267.5

)%

 

 

 

Acquisition-related adjustments

 

265

 

 

350

 

Share-based compensation

 

780

 

 

922

 

Restructuring and other charges

 

943

 

 

200

 

(Gains) losses on equity investments, net

 

120

 

 

24

 

(Gains) losses from divestiture

 

(39

)

 

(39

)

Adjustments attributable to non-controlling interest

 

(18

)

 

(18

)

Income tax effects

 

(358

)

 

(2,373

)

 

 

 

 

 

 

 

Acquisition-related adjustments

 

0.06

 

 

0.08

 

Share-based compensation

 

0.18

 

 

0.22

 

Restructuring and other charges

 

0.22

 

 

0.05

 

(Gains) losses on equity investments, net

 

0.03

 

 

0.01

 

(Gains) losses from divestiture

 

(0.01

)

 

(0.01

)

Adjustments attributable to non-controlling interest

 

 

 

 

Income tax effects

 

(0.08

)

 

(0.57

)

 

 

 

 

 

 

 

Net partner contributions and incentives received (cash expended) for property plant and equipment

 

5,863

 

 

(5,454

)

Payments on finance leases

 

 

 

(81

)

 

 

 

 

Intel Corporation Supplemental Reconciliations of GAAP Outlook to Non-GAAP Outlook

Set forth below are reconciliations of the non-GAAP financial measure to the most directly comparable US GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP, and the financial outlook prepared in accordance with US GAAP and the reconciliations from this Business Outlook should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustments made to the comparable US GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

 

 

Approximately

 

Acquisition-related adjustments

 

1.7

%

Share-based compensation

 

1.8

%

 

 

 

 

Income tax effects

 

(21

)%

 

 

 

Acquisition-related adjustments

 

0.06

 

Share-based compensation

 

0.23

 

Restructuring and other charges

 

0.06

 

(Gains) losses from divestiture

 

(0.01

)

Adjustments attributable to non-controlling interest

 

 

Income tax effects

 

(0.13

)

Non-GAAP gross margin percentage and non-GAAP EPS outlook based on the mid-point of the revenue range.

Intel Corporation Supplemental Reconciliations of Other GAAP to Non-GAAP Forward-Looking Estimates

Set forth below are reconciliations of the non-GAAP financial measure to the most directly comparable US GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP, and the reconciliations should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustments made to the comparable US GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

 

 

 

 

Approximately

 

Approximately

 

 

 

 

 

 

 

Acquisition-related adjustments

 

(0.2)

 

(0.1)

Share-based compensation

 

(2.7)

 

(2.5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from capital-related government incentives

 

(1.5 - 3.5)

 

(4.0 - 6.0)

Partner contributions

 

(12.5)

 

(4.0 - 5.0)

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801042170/en/

Kylie Altman Investor Relations 1-916-356-0320 [email protected] Penny Bruce Media Relations 1-408-893-0601 [email protected]

Source: Intel Corporation

Released Aug 1, 2024 • 4:01 PM EDT

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