Mobileye Global Inc. 10-K

Item 8. Financial Statements INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ ​ Page Report of Independent Registered Public Accounting Firm (PCAOB name: Kesselman & Kesselman C.P.A.s and PCAOB ID: 1309 ) 90 Consolidated Balance Sheets 92 Consolidated Statements of Operations and Comprehensive Income (Loss). 93 Consolidated Statements of Changes in Equity 94 Consolidated Statements of Cash Flows 95 Notes to Consolidated Financial Statements 96 ​ ​ ​ ​ 89 Table of Contents Report of Independent Registered Public Accounting Firm ​ To the Board of Directors and Shareholders of Mobileye Global Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Mobileye Global Inc. and its subsidiaries (the “ Company ” ) as of December 31, 2022 and December 25, 2021, and the related consolidated statements of operations and comprehensive income (loss), of changes in equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “ consolidated financial statements ” ). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and December 25, 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion These consolidated financial statements are the responsibility of the Company ’ s management. Our responsibility is to express an opinion on the Company ’ s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 90 Table of Contents Amortization of Identified Intangible Assets As described in Note 12 to the consolidated financial statements, the Company ’ s net identified intangible asset balance was $2,527 million at December 31, 2022 and the amortization expenses were $544 million for the year ended December 31, 2022. These identified intangible assets consist of developed technology and customer relationships and brands. The amortization expenses recorded for developed technology and customer relationships and brands includes significant judgment in estimating their useful lives. The principal considerations for our determination that performing procedures relating to the amortization of identified intangible assets is a critical audit matter are (i) there was a high degree of auditor judgment and subjectivity in applying procedures relating to the estimated useful lives of intangible assets due to the significant amount of judgment by management when developing the estimate; and (ii) significant audit effort was required in evaluating the significant assumptions relating to the estimated useful lives. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) testing management's process for estimating the useful lives of identified intangible assets, including the consideration of current and past performance and management's product roadmap; and (ii) evaluating the appropriateness of the determination of the useful lives, including the consistency with external market and industry data, the corroboration with evidence obtained in other areas of the audit and assessing the adequacy of disclosures in the consolidated financial statements. ​ ​ ​ / s/ Kesselman & Kesselman Certified Public Accountants (Isr.) A member firm of PricewaterhouseCoopers International Limited Tel-Aviv, Israel March 9, 2023 ​ ​ ​ We have served as the Company's auditor since 2022. ​ ​ ​ ​ 91 Table of Contents MOBILEYE GLOBAL INC. CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 25, U.S. dollars in millions 2022 2021 Assets ​ ​ Current assets ​ ​ Cash and cash equivalents ​ $ 1,024 ​ $ 616 Trade account receivables, net ​ 269 ​ 155 Inventories ​ 113 ​ 97 Related party loan ​ — ​ 1,326 Other current assets ​ 110 ​ 76 Total current assets ​ $ 1,516 ​ $ 2,270 Non-current assets ​ ​ Property and equipment, net ​ 384 ​ 304 Intangible assets, net ​ 2,527 ​ 3,071 Goodwill ​ 10,895 ​ 10,895 Other long-term assets ​ 119 ​ 115 Total non-current assets ​ 13,925 ​ 14,385 TOTAL ASSETS ​ $ 15,441 ​ $ 16,655 ​ ​ ​ ​ ​ ​ ​ Liabilities and Equity ​ ​ ​ Current liabilities ​ ​ Accounts payable and accrued expenses ​ $ 189 ​ $ 160 Employee related accrued expenses ​ 88 ​ 102 Related party payable ​ 73 ​ 163 Other current liabilities ​ 34 ​ 49 Total current liabilities ​ 384 ​ 474 Non-current liabilities ​ ​ Long-term employee benefits ​ 56 ​ 94 Deferred tax liabilities ​ 162 ​ 181 Other long-term liabilities ​ 45 ​ 17 Total non-current liabilities ​ 263 ​ 292 TOTAL LIABILITIES ​ $ 647 ​ $ 766 Equity ​ ​ Class A common stock: $ 0.01 par value; 4,000,000,000 shares authorized; shares issued and outstanding: 51,911,905 as of December 31, 2022 and none as of December 25, 2021 ​ ​ 1 ​ ​ — Class B common stock: $ 0.01 par value; 1,500,000,000 shares authorized; shares issued and outstanding: 750,000,000 as of December 31, 2022 and none as of December 25, 2021 ​ ​ 8 ​ ​ — Additional paid-in capital ​ ​ 14,737 ​ ​ — Parent net investment ​ — ​ 15,884 Accumulated other comprehensive income (loss) ​ ( 9 ) ​ 5 Retained earnings ​ ​ 57 ​ ​ — TOTAL EQUITY ​ 14,794 ​ 15,889 TOTAL LIABILITIES AND EQUITY ​ $ 15,441 ​ $ 16,655 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 92 Table of Contents MOBILEYE GLOBAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ December 31, December 25, December 26, U.S. dollars in millions, except share and per share amounts 2022 2021 2020 Revenue $ 1,869 ​ $ 1,386 $ 967 Cost of revenue ​ 947 ​ ​ 731 ​ 591 Gross profit ​ 922 ​ ​ 655 ​ 376 Research and development, net ​ 789 ​ ​ 544 ​ 440 Sales and marketing ​ 120 ​ ​ 134 ​ 116 General and administrative ​ 50 ​ ​ 34 ​ 33 Total operating expenses ​ 959 ​ ​ 712 ​ 589 Operating income (loss) ​ ( 37 ) ​ ​ ( 57 ) ​ ( 213 ) Interest income with a related party ​ 18 ​ ​ 3 ​ 6 Interest expenses with a related party ​ ( 24 ) ​ ​ — ​ — Other income (expense), net ​ 11 ​ ​ ( 3 ) ​ ( 5 ) Income (loss) before income taxes ​ ( 32 ) ​ ​ ( 57 ) ​ ( 212 ) Benefit (provision) for income taxes ​ ( 50 ) ​ ​ ( 18 ) ​ 16 Net income (loss) ​ $ ( 82 ) ​ $ ( 75 ) ​ $ ( 196 ) Earnings (loss) per share attributed to Class A and Class B stockholders: ​ ​ ​ ​ ​ Basic and diluted ​ $ ( 0.11 ) ​ $ ( 0.10 ) ​ $ ( 0.26 ) Weighted-average number of shares used in computation of earnings (loss) per share attributed to Class A and Class B stockholders (in millions): ​ ​ ​ ​ ​ Basic and diluted ​ 759 ​ ​ 750 ​ 750 Net income (loss) ​ ( 82 ) ​ ​ ( 75 ) ​ ( 196 ) Other comprehensive income (loss), net of tax ​ ( 14 ) ​ ​ 5 ​ — TOTAL COMPREHENSIVE INCOME (LOSS) ​ $ ( 96 ) ​ $ ( 70 ) ​ $ ( 196 ) ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 93 Table of Contents MOBILEYE GLOBAL INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ ​ ​ ​ ​ ​ ​ ​ Accumulated Other ​ ​ ​ ​ Total ​ ​ Number of ​ ​ ​ Additional Parent Net ​ Comprehensive ​ Retained ​ Shareholders' U.S. dollars in millions, except per share amounts shares Amount paid-in capital Investment Income (Loss) Earnings Equity Balance as of December 28, 2019 — $ — $ — ​ $ 14,468 ​ $ — $ — ​ $ 14,468 Net income (loss) — ​ — ​ — ​ ​ ( 196 ) ​ ​ — ​ — ​ ​ ( 196 ) Net transfer from (to) Parent — ​ — ​ — ​ 1,570 ​ — ​ — ​ 1,570 Balance as of December 26, 2020 — ​ — ​ — ​ ​ 15,842 ​ ​ — ​ — ​ ​ 15,842 Other comprehensive income (loss), net — ​ — ​ — ​ ​ — ​ ​ 5 ​ ​ — ​ ​ 5 Net income (loss) — ​ — ​ — ​ ​ ( 75 ) ​ ​ — ​ ​ — ​ ​ ( 75 ) Net transfer from (to) Parent — ​ — ​ — ​ ​ 117 ​ ​ — ​ ​ — ​ ​ 117 Balance as of December 25, 2021 — ​ — ​ — ​ ​ 15,884 ​ ​ 5 ​ ​ — ​ ​ 15,889 Net income (loss) — ​ — ​ — ​ ( 139 ) ​ ​ — ​ ​ 57 ​ ​ ( 82 ) Other comprehensive income (loss), net — ​ — ​ — ​ — ​ ​ ( 14 ) ​ ​ — ​ ​ ( 14 ) Equity transaction in connection with the legal purchase of Moovit entities — ​ — ​ — ​ ( 900 ) ​ — ​ — ​ ​ ( 900 ) Dividend Note with related party — ​ ​ — ​ ​ — ​ ​ ( 3,500 ) ​ — ​ — ​ ​ ( 3,500 ) Dividend distribution — ​ ​ — ​ ​ — ​ ​ ( 337 ) ​ — ​ ​ — ​ ​ ( 337 ) Tax sharing agreement with Parent ​ — ​ ​ — ​ ​ ( 12 ) ​ ​ ( 22 ) ​ — ​ ​ — ​ ​ ( 34 ) Share-based compensation expense ​ — ​ ​ — ​ ​ 50 ​ 124 ​ — ​ ​ — ​ ​ 174 Recharge to Parent for Share-based compensation ​ — ​ ​ — ​ ​ ( 66 ) ​ ( 52 ) ​ — ​ ​ — ​ ​ ( 118 ) Net transfer from (to) Parent ​ — ​ ​ — ​ ​ — ​ 84 ​ — ​ ​ — ​ ​ 84 Issuance of Class B common stock and reclassification of Parent Net Investment in connection with the Initial Public Offering ​ 750 ​ ​ 8 ​ ​ 11,134 ​ ( 11,142 ) ​ — ​ ​ — ​ ​ — Issuance of Class A common stock in Initial Public Offering, net of underwriting discounts and commissions and offering costs ​ 52 ​ ​ 1 ​ ​ 1,031 ​ — ​ — ​ ​ — ​ ​ 1,032 Dividend Note contribution from related party ​ — ​ ​ — ​ ​ 2,600 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,600 Balance as of December 31, 2022 ​ 802 ​ $ 9 ​ $ 14,737 $ — $ ( 9 ) ​ $ 57 ​ $ 14,794 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 94 Table of Contents MOBILEYE GLOBAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ December 31, December 25, December 26, U.S. dollars in millions 2022 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES ​ ​ ​ Net income (loss) ​ $ ( 82 ) ​ $ ( 75 ) ​ $ ( 196 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation of property and equipment ​ ​ 23 ​ ​ 17 ​ ​ 13 Share-based compensation ​ ​ 174 ​ ​ 97 ​ ​ 85 Amortization of intangible assets ​ ​ 544 ​ ​ 509 ​ ​ 450 Exchange rate differences on cash and cash equivalents ​ ​ 6 ​ ​ — ​ ​ — Deferred income taxes ​ ​ ( 9 ) ​ ​ ( 29 ) ​ ​ ( 53 ) Interest on Dividend Note to related party, net ​ ​ 18 ​ ​ — ​ ​ — Interest with related party, net ​ ​ 12 ​ ​ 20 ​ ​ ( 5 ) Other ​ ​ ( 2 ) ​ ​ — ​ ​ 1 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Decrease (increase) in trade accounts receivables ​ ​ ( 114 ) ​ ​ ( 62 ) ​ ​ 7 Decrease (increase) in other current assets ​ ​ ( 10 ) ​ ​ ( 17 ) ​ ​ ( 17 ) Decrease (increase) in inventories ​ ​ ( 16 ) ​ ​ 31 ​ ​ ( 25 ) Increase (decrease) in account payables and accrued expenses ​ ​ 58 ​ ​ 59 ​ ​ ( 14 ) Increase (decrease) in employee-related accrued expenses and long term benefits ​ ​ ( 52 ) ​ ​ 36 ​ ​ 37 Increase (decrease) in other current-liabilities ​ ​ ( 16 ) ​ ​ 20 ​ ​ ( 3 ) Decrease (increase) in other long term assets ​ ​ 17 ​ ​ ( 7 ) ​ ​ ( 9 ) Increase (decrease) in long-term liabilities ​ ​ ( 5 ) ​ ​ — ​ ​ — Net cash provided by operating activities ​ ​ 546 ​ ​ 599 ​ ​ 271 CASH FLOWS FROM INVESTING ACTIVITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase of property and equipment ​ ​ ( 111 ) ​ ​ ( 143 ) ​ ​ ( 91 ) Repayment of loan due from related party ​ ​ 1,635 ​ ​ 460 ​ ​ 6 Issuance of loan to related party ​ ​ ( 336 ) ​ ​ ( 474 ) ​ ​ ( 135 ) Cash paid for acquisition of Moovit, net of cash acquired ​ ​ — ​ ​ — ​ ​ ( 745 ) Other ​ ​ ( 1 ) ​ ​ — ​ ​ — Net cash provided by (used in) investing activities ​ ​ 1,187 ​ ​ ( 157 ) ​ ​ ( 965 ) CASH FLOWS FROM FINANCING ACTIVITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ Business combination deferred consideration payment ​ ​ — ​ ​ ( 90 ) ​ ​ — Net transfers from Parent ​ ​ 84 ​ ​ 181 ​ ​ 825 Dividend paid ​ ​ ( 337 ) ​ ​ — ​ ​ — Share-based compensation recharge ​ ​ ( 280 ) ​ ​ — ​ ​ ( 78 ) Proceeds from initial public offering, net of offering costs ​ ​ 1,034 ​ ​ — ​ ​ — Changes in withholding tax related to employee stock plans ​ ​ — ​ ​ — ​ ​ ( 15 ) Equity transaction in connection with the legal purchase of Moovit entities ​ ​ ( 900 ) ​ ​ — ​ ​ — Repayment of Dividend Note with related party ​ ​ ( 918 ) ​ ​ — ​ ​ — Net cash provided by (used in) financing activities ​ ​ ( 1,317 ) ​ ​ 91 ​ ​ 732 Effect of foreign exchange rate changes on cash and cash equivalents ​ ​ ( 6 ) ​ ​ ( 1 ) ​ ​ — Increase in cash, cash equivalents and restricted cash ​ ​ 410 ​ ​ 532 ​ ​ 38 Balance of cash, cash equivalents and restricted cash, at beginning of year ​ ​ 625 ​ ​ 93 ​ ​ 55 Balance of cash, cash equivalents and restricted cash, at end of year ​ $ 1,035 ​ $ 625 ​ $ 93 Supplementary non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Non cash purchase of property and equipment ​ $ 13 ​ $ 21 ​ $ 27 Non-cash share-based compensation recharge ​ ​ — ​ ​ 162 ​ ​ — Conversion to equity of loan due to Parent ​ ​ — ​ ​ — ​ ​ 679 Dividend Note with related party ​ ​ 3,500 ​ ​ — ​ ​ — Dividend Note contribution from related party ​ ​ ( 2,600 ) ​ ​ — ​ ​ — Unpaid offering costs ​ ​ 2 ​ ​ — ​ ​ — Contribution of Moovit previously held shares by Parent ​ ​ — ​ ​ — ​ ​ 59 Tax sharing agreement with Parent ​ ​ 34 ​ ​ — ​ ​ — Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash (paid) for income taxes, net of refunds ​ $ ( 57 ) ​ $ ( 44 ) ​ $ ( 42 ) Interest paid to related party ​ ​ ( 6 ) ​ ​ — ​ ​ — ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 95 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 GENERAL Background Mobileye Global Inc. (“Mobileye”, “the Company” or “we”) is a leader in the development and deployment of advanced driver assistance systems (“ADAS”) and autonomous driving technologies and solutions, aimed to provide the capabilities required for the future of autonomous driving, leveraging a comprehensive suite of purpose-built software and hardware technologies. Mobileye combines the operations of its consolidated subsidiaries, which include the Mobileye Group, as defined below. Mobileye operates as a subsidiary of Intel Corporation (“Intel” or the “Parent”), which acquired a majority stake in Mobileye in August 2017 (the “Mobileye Acquisition”). The remaining issued and outstanding shares of Mobileye were acquired by Intel in 2018. Before the completion of the Mobileye IPO and the reorganization (both as defined below) in October 2022, the Company consisted of the “Mobileye Group”, which combined the operations of Cyclops Holdings LLC (“Cyclops”), Mobileye B.V. and its subsidiaries, GG Acquisition Ltd. and Moovit App Global Ltd. and its subsidiaries (“Moovit”) and certain Intel employees mainly in research and development (the “Intel Aligned Groups”). In December 2021, Intel announced plans to pursue an initial public offering of the Mobileye Group. In January 2022, Intel incorporated a new legal entity, Mobileye Global Inc., with the intent to contribute the Mobileye Group to Mobileye Global Inc. and to have Mobileye Global Inc. offer newly issued shares of common stock of Mobileye Global Inc. in an initial public offering. On October 28, 2022, the initial public offering of Mobileye (the “Mobileye IPO”) was completed and we issued 41,000,000 shares of our Class A common stock, at $ 21 per share, before underwriting discounts and commissions. On November 1, 2022, we closed the sale of an additional 6,150,000 shares pursuant to the exercise of the underwriters’ over-allotment option. The offer and sale were pursuant to the registration statement on Form S-1 (File No. 333-267685), as amended, which was declared effective by the SEC on October 25, 2022. Mobileye’s Class A common stock began trading on the Nasdaq Global Select Market on October 26, 2022 under the ticker symbol “MBLY”. Concurrently with the closing of the Mobileye IPO, the Company issued an additional 4,761,905 shares of its Class A common stock to General Atlantic (ME), L.P., a Delaware limited partnership, at $ 21 per share, pursuant to a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, for gross proceeds of $ 100 million (the “Concurrent Private Placement”). The Mobileye IPO generated proceeds to the Company of approximately $ 1.0 billion, including the proceeds from the underwriters exercise of their option and the Concurrent Private Placement, net of underwriting discounts and commissions in the amount of $ 41 million and offering costs in the amount of $ 18 million. In November 2022, we used approximately $ 0.9 billion out of the net proceeds to repay a portion of the indebtedness under the Dividend Note (as discussed and defined in Note 9) and Intel contributed to Mobileye the remaining portion of the Dividend Note such that no amounts under the Dividend Note remained owed by us to Intel. The portion of the net proceeds used to repay part of the Dividend Note was such that we retained $ 1.0 billion in total cash and cash equivalents, as stipulated by the Master Transaction Agreement. For further details, refer to Note 9. Prior to the completion of the Mobileye IPO, we were a wholly-owned business of Intel Corporation. Upon the closing of the Mobileye IPO (after giving effect to the exercise of the underwriters’ over-allotment option), Intel continues to directly or indirectly hold all of the Class B common stock of Mobileye, which represent approximately 99.3 % of the voting power of our common stock. Upon completion of the IPO, we completed the legal entity reorganization (“reorganization”) of the operations comprising the Mobileye Group business so that they are all under the single parent entity, Mobileye Global Inc., and the filing and effectiveness of our amended and restated certificate of incorporation. The reorganization was accomplished through a series of transactions and agreements with Intel, including the legal purchase of 100 % of the issued and outstanding equity interests of the Moovit entities from Intel. For further details, refer to Note 9. 96 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company operates on a 52-week or 53-week fiscal year that ends on the last Saturday in December. Fiscal year 2022 was a 53-week fiscal year. Fiscal years 2021 and 2020 were 52-week fiscal years. Prior to the Mobileye IPO The financial statements and accompanying notes that include periods ending or as of dates prior to the completion of the Mobileye IPO have been derived from the consolidated financial statements and accounting records of Intel and are presented as if the Company had been operating as a stand-alone company. The assets, liabilities, revenue, and expenses directly attributable to the Company’s operations, including the acquired goodwill and intangible assets, have been reflected in these consolidated financial statements on a historical cost basis, as included in the consolidated financial statements of Intel. The Company utilized the Intel Aligned Groups mainly in research and development activities. The associated costs of the Intel Aligned Groups are reflected on a specific attribution basis in the consolidated statements of operations and comprehensive income (loss). Intel Aligned Groups also participated in various Intel compensation and benefit plans. Portions of those plans’ costs were based on actual headcount and included in these consolidated financial statements. These costs are not necessarily indicative of costs that would have been incurred had the Company operated on a stand-alone basis. The statements of operations and comprehensive income (loss) include allocations of general corporate expenses from Intel. These expenses have been allocated to the Company on the basis of direct usage when identifiable or allocated on the basis of headcount. Management of the Company and Parent considered the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of the services provided to or the benefit received by the Company during the periods presented. Mobileye largely continued to operate as a standalone operation and had not been fully integrated into Intel, with limited use of corporate overhead functions. The allocated costs for the periods presented in the statement of operations and comprehensive income (loss) were not material. The allocations may not be reflective of the expenses that would have incurred had the Company operated as a stand-alone company for the periods presented. These costs also may not be indicative of the expenses that the Company will incur in the future or would have incurred if the Company had obtained these services from a third party. Actual costs that may have been incurred if the Company had operated as a stand-alone company would depend on a number of factors, including the chosen organizational structure, the outsourcing of certain functions, and other strategic decisions. As Mobileye Group was not historically held by a single legal entity, total parent net investment is shown in lieu of equity in the periods prior to the completion of the Mobileye IPO and represents Intel’s total interest in the recorded net assets of Mobileye Group. All intercompany transactions within the previously combined businesses of the Company have been eliminated. Transactions between the Company and Intel, arising from arrangements with Intel and other similar related-party transactions, were considered to be effectively settled at the time the transactions were recorded, unless otherwise noted. The total net effect of the settlement of these transactions was reflected within parent net investment as a component of equity and within net transfers from Parent as a financing activity in the periods prior to the completion of the Mobileye IPO, unless otherwise noted. Following the Mobileye IPO Following the completion of the Mobileye IPO, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Following the legal entity reorganization and the completion of the Mobileye IPO, Intel continues to control the Company and holds all of the Company’s Class B common stock. Refer to Note 9 Related Party Transactions and Note 6 Equity for further information. The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. 97 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts and events reported and disclosed in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions and factors, including the current economic environment, that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. On an on-going basis, management evaluates its estimates, judgments, and assumptions. The most significant estimates and assumptions relate to useful lives of intangible assets, impairment assessment of intangible assets and goodwill, and income taxes. Functional currency The majority of the Company and its subsidiaries revenue are denominated in the United States (“U.S.”) dollar, as are most purchases of materials and components. The Company’s financings and capitalization have also been denominated in the U.S. dollar. Management believes that the currency of the primary economic environment in which the Company and its subsidiaries operate is the U.S. dollar, and thus, the U.S. dollar is the functional and reporting currency of the Company and its subsidiaries. Accordingly, transactions in currencies other than the U.S. dollar are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. Monetary assets and liabilities that are denominated in currencies other than the U.S. dollar are measured using the official exchange rate at the balance sheet date. Non-monetary assets and liabilities are remeasured into the functional currency using the historical exchange rate. The effects of foreign currency remeasurements are recorded in the consolidated statements of operations and comprehensive income (loss) as other expenses, net. Cash, cash equivalents and restricted cash Cash equivalents consist of short term deposits and money market funds. The short term deposits are short-term unrestricted highly liquid investments that are readily convertible to cash and with original maturities of three months or less at acquisition. The money market funds consist of institutional investors money market funds and are readily redeemable to cash. Restricted bank deposits are cash amounts related to bank guarantees mainly in connection with lease agreements and import of vehicles. Such deposits are stated at cost, which approximates market values. These amounts are included in other current and long-term assets on the consolidated balance sheets. Cash, cash equivalents and restricted cash managed through bank accounts legally owned by the Parent at the corporate level were not attributable to the Company for any of the periods presented. Only cash and restricted cash legally owned by the Company are reflected on the consolidated balance sheets. The following is a reconciliation of the cash, cash equivalents and restricted cash for each year presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ December 31, December 25, U.S. dollars in millions 2022 2021 Cash $ 188 $ 407 Short term deposits ​ ​ 285 ​ ​ 209 Money market funds ​ ​ 551 ​ ​ — Restricted cash (within other current and other long-term assets) ​ 11 ​ 9 Cash, cash equivalents and restricted cash ​ $ 1,035 ​ $ 625 ​ Fair value measurement When determining fair value, the Company considers the principal or most advantageous market in which it would transact, as well as assumptions that market participants would use when pricing the asset or liability. The Company assesses fair value hierarchy levels for its financial assets based on the underlying financial instrument. 98 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Consistent with Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, the Company follows a three-tier fair value hierarchy as a basis for considering the assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but are corroborated by market data or active market data for similar, but not identical assets or liabilities. Level 3: Unobservable inputs are used when little or no market data is available. The Company monitors and reviews the inputs and results of these valuation models to help ensure the fair value measurements are reasonable and consistent with market experience in similar asset classes. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers credit risk in its assessment of fair value. The Company measures its investments in short term deposits classified as cash equivalents at fair value on a recurring basis, due to the short maturity of these items, the carrying value is deemed to approximate to fair value. The Company’s investment in money market funds are measured at fair value within Level 1 of the fair value hierarchy because they consist of financial assets for which quoted prices are available in an active market. Interest income related to money market funds for the year ended December 31, 2022, amounted to $ 1 million. The carrying amounts of trade accounts receivable and accounts payable approximate fair value because of their generally short maturities. The Company has goodwill that is required to be recorded at fair value only if an impairment is recognized in the current year. As described in further details in Note 11, goodwill is evaluated for impairment at least once a year or more frequently if indicators of potential impairment exist. Inventories Inventories are stated at the lower of cost and net realizable value. The Company computes inventory cost on an average cost basis and adjusts for excess and obsolete inventories primarily based on future demand and market conditions, including product-specific facts and circumstances, which considers the Company’s customer base and an assessment of selling price in relation to product cost. Once written-down, a new lower cost basis for that inventory is established. Property and equipment, net Property and equipment are stated at cost, less accumulated depreciation. Property and equipment are depreciated on a straight-line basis over their estimated useful lives. The estimated useful lives per asset type are as follows: ​ ​ ​ ​ ​ ​ Years Computers, electronic equipment and software 3 - 7 Vehicles 7 Office furniture and equipment 14 ​ Leasehold improvements are amortized by the straight-line method over the shorter of the term of the lease and estimated useful life of the improvements. Buildings and any assets in construction are not depreciated until they are available for their intended use. 99 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Business Combinations The Company accounts for business combinations using the acquisition method of accounting. The Company includes the results of operations of the businesses that we acquire in the consolidated financial statements beginning on the date of acquisition. The Company allocates the purchase price paid for assets acquired and liabilities assumed in connection with the Company’s acquisitions based on their estimated fair values at the time of acquisition. This allocation involves a number of assumptions, estimates, and judgments in determining the fair value of the following: ● intangible assets, including the valuation methodology, estimations of future cash flows, discount rates, and growth rates, as well as the estimated useful life of intangible assets; ● deferred tax assets and liabilities, uncertain tax positions, and tax-related valuation allowances, which are initially estimated as of the acquisition date; ● inventory; property and equipment; pre-existing liabilities or legal claims; deferred revenue; and contingent consideration, each as may be applicable; and ● goodwill measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. The Company’s assumptions and estimates are based on comparable market data and information obtained from the Company’s management and the management of the acquired companies. The Company allocates goodwill to the reporting units of the business that are expected to benefit from the acquisition. Goodwill The Company performs an annual impairment assessment of goodwill at the reporting unit level in the fourth quarter of each year, or more frequently if indicators of potential impairment exist. The analysis may include both qualitative and quantitative factors to assess the likelihood of impairment. In accordance with ASC 350, the Company initially assesses qualitative factors to determine whether the existence of events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit. If the Company determines, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, it performs a quantitative goodwill impairment test by comparing the reporting unit’s fair value with its carrying amount. An impairment loss is recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value. The Company did not record any impairment of goodwill for any of the periods presented. The Company’s quantitative impairment test may consider both the income approach and the market approach to estimate a reporting unit’s fair value. Significant estimates for the income approach include growth rates, estimated costs, and discount rates based on a reporting unit’s weighted average cost of capital. The estimated fair value using a market approach is based on a number of assumptions, including current market capitalization as corroboration of fair value. Forecasts and estimates are based on assumptions that are consistent with the plans and estimates used to manage the business. Changes in these estimates could change the conclusion regarding an impairment of goodwill. Intangible assets, net The Company amortizes acquisition-related intangible assets that are subject to amortization over their estimated useful life. Once these research and development projects are completed, the asset balances are transferred from in-process research and development to acquisition-related developed technology and are subject to amortization from this point forward. The asset balances relating to projects that are abandoned after acquisition are impaired and expensed to research and development. The Company performs a quarterly review of significant finite-lived identified intangible assets to determine whether facts and circumstances indicate that the carrying amount may not be recoverable. These reviews can be affected by various factors, including 100 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS external factors such as industry and economic trends, and internal factors such as changes in the Company’s business strategy and its forecasts for specific product lines. Impairment of long-lived assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Assets are categorized and evaluated for impairment at the lowest level of identifiable cash flows. In the event that the sum of the expected future undiscounted cash flows expected to be generated by the long-lived assets is less than the carrying amount of such assets, an impairment charge would be recognized and the assets would be written down to their estimated fair values. During the periods presented, no impairment indicators were identified. Research and development, net Research and development expenses are expensed as incurred, and consist primarily of personnel, facilities, equipment, and supplies for research and development activities. The Company follows the provisions of ASC 985, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed, which requires that software development costs incurred in conjunction with development be charged to research and development expenses until technological feasibility is established. The technological feasibility is established upon completion of a working model. The costs incurred by the Company between technological feasibility and general release to the public have been insignificant. Accordingly, all research and development costs have been expensed as incurred. The Company occasionally enters into best-efforts nonrefundable, non-recurring engineering (“NRE”) arrangements pursuant to which the Company is reimbursed for a portion of the research and development expenses attributable to specific development programs. The Company does not receive any additional compensation or royalties upon completion of such projects and the potential customer does not commit to purchase the resulting product in the future. The participation reimbursement received by the Company does not depend on whether there are future benefits from the project. All intellectual property generated from these arrangements is exclusively owned by the Company. Participation in expenses for research and development projects are recognized on the basis of the costs incurred and are netted against research and development expenses in the consolidated statements of operations and comprehensive income (loss). Research and development reimbursements of $ 58 million, $ 54 million, and $ 48 million were offset against research and development costs in the years ended December 31, 2022, December 25, 2021, and December 26, 2020, respectively. Derivatives and hedging Beginning in 2021, as part of Intel’s corporate hedging program, Intel is hedging forecasted cash flows denominated in Israeli Shekel (“ILS”) related to the Company. ILS is the largest operating expense currency of the Company. Intel combines all of its ILS exposures, and as part of Intel’s hedging program enters into hedging contracts to hedge Intel’s combined ILS exposure. Derivative gains and losses attributed to these consolidated financial statements are recorded under accumulated other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects the statement of operations. During the fourth quarter of 2022, the Company de-designated its remaining cash flow hedges for forecasted operating expenses denominated in ILS. As the hedged transactions and cash flows related to the outstanding instruments are expected to occur as originally forecasted, the associated gains and losses deferred in accumulated other comprehensive loss on the Company’s consolidated balance sheet will remain and will be reclassified into earnings within the next 12 months, in the same period or periods during which the originally hedged transactions affect earnings. Any subsequent changes in the fair value of the outstanding derivative instruments after the de-designation and termination of hedge accounting, are immediately reflected in operating expenses. 101 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The notional amount and fair value of derivatives outstanding at Intel on behalf of Mobileye were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ December 31, December 25, U.S. dollars in millions 2022 2021 Notional amount of derivatives $ 93 $ 230 Fair value of derivatives receivable from (payable to) Intel $ ( 9 ) $ 5 ​ The change in accumulated other comprehensive income (loss) relating to gains (losses) on derivatives used for hedging was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ December 25, U.S. dollars in millions 2022 2021 Other comprehensive income (loss) before reclassifications $ ( 33 ) $ 18 Amounts reclassified out of accumulated other comprehensive income (loss) ​ 18 ​ ( 13 ) Tax effects ​ 1 ​ — Other comprehensive income (loss), net $ ( 14 ) $ 5 ​ Revenue recognition The Company recognizes revenue when performance obligations are satisfied as evidenced by the transfer of control of the Company’s products or services to customers. Substantially all of the Company’s revenue is derived from product sales. In accordance with contract terms, revenue for product sales is recognized at the time of product shipment from the Company’s facilities, as determined by the agreed upon ‘ex-works’ shipping terms, which specify that title and risks will pass to the customer upon delivery at the Company’s warehouse. Revenue for product sales to resellers and distributors is recognized at the time of delivery of products to the resellers and distributors. The Company measures revenue based on the amount of consideration the Company expects to be entitled to in exchange for products or services. Variable consideration is estimated and reflected as an adjustment to the transaction price. The Company determines variable consideration, which consists primarily of various volume rebates, by estimating the most likely amount of consideration the Company expects to receive from the customer. Volume rebates earned by customers are offset against their receivable balances. Rebates earned by customers when they do not have outstanding receivable balances are recorded within other current liabilities. Substantially all of the Company’s contracts do not include right of return or acceptance provisions. Revenue is recognized net of any taxes invoiced to customers, which are subsequently remitted to governmental authorities. Any shipping and handling costs related to the fulfillment of sales are included in cost of revenue. Sales of the Company’s products regularly include warranties which provides the customer with assurance that the products delivered will perform in accordance with agreed-upon specifications. These standard warranties are assurance-type warranties and do not offer any services in addition to the assurance that the product will continue working as specified. Therefore, the warranties are not considered separate performance obligations. The Company is generally the principal in a transaction and, therefore, primarily records revenue on a gross basis. When the Company is a principal in a transaction, it has determined that it controls the ability to direct the use of the product prior to transfer to a customer, is primarily responsible for fulfilling the promise to provide the product or service to the customer, has discretion in establishing prices, and ultimately controls the transfer of the product or services provided to the customer. Advertising expenses Advertising expenses are charged to sales and marketing on the consolidated statements of operations and comprehensive income (loss) as incurred. Advertising expenses for the years ended December 31, 2022, December 25, 2021, and December 26, 2020, amounted to $ 3 million, $ 2 million, and $ 3 million, respectively. 102 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Share-based compensation Prior to the completion of the Mobileye IPO, the Company’s employees participated in Intel’s equity incentive plans and were granted options and restricted stock units (“RSUs”) on Intel’s common shares. In connection with the Mobileye IPO, the Company approved the Mobileye Global Inc. 2022 Equity Incentive Plan (the “2022 Plan”) which allows the compensation committee of the Company to make equity-based incentive awards to our employees, consultants and outside directors. In October 2022, the Company’s board of directors approved the issuance of RSUs under the 2022 Plan. Equity awards granted to employees are accounted for using the estimated grant date fair value. The Company estimates the fair value of employee stock options to purchase shares of Intel common stock with a service condition using an option pricing model at the date of grant and values RSUs based on the market value of the underlying share of Intel or Mobileye common stock (as applicable) at the date of grant. The Company recognizes share-based compensation expense for the value of its awards, which have graded vesting based on service conditions, using the straight-line method over the requisite service period of each of the awards, net of estimated forfeitures. Income Taxes The provision for income tax consists of income taxes in the various jurisdictions where the Company is subject to taxation, primarily the United States and Israel. The Company computes the provision for income taxes under the asset and liability method prescribed by the Financial Accounting Standards Board (“FASB”) Guidance ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in these consolidated financial statements. Under this method, deferred tax assets and liabilities, resulting from temporary differences between the financial reporting and tax bases of assets and liabilities, are measured as of the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The realization of deferred tax assets depends upon the existence of sufficient taxable income, of appropriate character, within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established when the Company determines, based on available information, that it is more likely than not that deferred tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be established, as well as the amount of such allowances. The Company records accruals for uncertain tax positions when the Company believes that it is more likely than not that a tax position will not be sustained on examination by tax authorities based on the technical merits of the position. The Company adjusts these accruals when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. During the years presented in the consolidated financial statements, certain components of the Company’s business operations were included in the consolidated US domestic income tax return filed by the Company’s Parent. The Company also files various foreign income tax returns on a separate basis, distinct from its Parent. The income tax provision included in the Company’s consolidated financial statements has been calculated using the separate return method, as if the Company had filed its own tax returns. The Company has entered into a Tax Sharing Agreement with its Parent that establishes the amount of cash payable for the Company’s share of the tax liability owed on consolidated tax return filings with its Parent. Any differences between taxes currently payable to the Company’s Parent under the Tax Sharing Agreement and the current tax provision computed on a separate return basis, is reflected as adjustments to additional paid-in capital in the consolidated statement of changes in equity and financing activities within the consolidated statement of cash flows. The Company will present tax loss and tax credit carry-forward attributes under the separate return method approach. Such tax attributes may not be benefited in the same period as the Company’s Parent on a consolidated tax return. For further detail regarding income tax, refer to Note 8, Income Taxes. 103 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Provision for warranties The Company provides warranties for its products, which vary with respect to each contract and in accordance with the nature of each specific product. The warranty terms vary from one to three years, with the vast majority of the Company’s products being subject to a warranty period of three years. The Company estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time revenue is recognized. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Provision for warranties is included in other current liabilities on the consolidated balance sheets. Provision for warranties as of December 31, 2022 and December 25, 2021, as well as warranty expenses for the each of the years ended December 31, 2022, December 25, 2021, and December 26, 2020, were not material. Loss contingencies The Company is currently involved in commercial claims within the ordinary course of business. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the loss can be reasonably estimated, the Company accrues a liability for the estimated loss. When accruing these costs, the Company recognizes an accrual for an amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other, the Company accrues for the minimum estimated loss within the range. The Company discloses contingencies when it believes that a loss is not probable, but reasonably possible. Management believes that there are no current matters that would have a material effect on the Company’s consolidated balance sheets, statement of operations or cash flows. Legal fees are expensed as incurred. Leases The Company accounts for leases in accordance with ASC 842, Leases, which requires lessees to recognize leases on the consolidated balance sheets and disclose key information about leasing arrangements. Leases primarily consist of real estate property and vehicles and are classified as operating leases with fixed payment terms. The Company determines if an arrangement is a lease, or contains a lease, at inception and records the leases upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are included in other long-term assets, other current liabilities, and other long-term liabilities on the consolidated balance sheet. Lease expenses for the operating leases are recognized on a straight-line basis over the lease term and are included in operating expenses in the consolidated statements of operations and comprehensive income (loss). Options to extend or terminate the lease are taken into account when it is reasonably certain at the commencement date that such options will be exercised. The Company elected to apply the short-term lease exemption for lease with a non-cancelable period of twelve months or less. Additionally, the Company has lease agreements with lease and non-lease components. The non-lease components are accounted for separately and not included in the leased assets and corresponding liabilities. On the commencement date, lease payments that include variable lease payments dependent on an index or a rate (such as the Consumer Price Index or a market interest rate), are initially measured using the index or rate at the commencement date. Variable payments that depend on performance or use of the underlying asset are not included in the lease payments. Such variable payments are recognized in the consolidated statements of operations and comprehensive income (loss) in the period in which the event or condition that triggers the payment occurs. These variable payment amounts were not material to the consolidated financial statements for the periods presented. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate because the interest rate implicit in most of its leases is not readily determinable. 104 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Earnings (loss) per share Basic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of common shares outstanding during the period. Undistributed earnings (loss) are allocated proportionally to Class A and Class B stockholders as both classes are entitled to share equally, on a per share basis, in dividends and other distributions. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, while giving effect to all potentially dilutive common shares to the extent they are dilutive. Potentially dilutive common shares result from the assumed vesting of RSUs under the 2022 Plan, using the “treasury stock” method. RSUs are not included in the computation of diluted earnings (loss) per share for the periods presented because the effect of their inclusion would have been anti-dilutive. Refer to Note 7 Earnings (Loss) per Share for a reconciliation as well as Share-based Compensation in Note 6 for further discussion on awards. Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, which include short-term deposits and money market funds, and also trade accounts receivable. The majority of the Company’s cash and cash equivalents are invested in banks domiciled in the U.S. and Europe, as well as in Israel. Generally, these cash equivalents may be redeemed upon demand. Short term bank deposits and money market funds, included in cash and cash equivalents, are held in the aforementioned banks. Accordingly, management believes that these bank deposits and money market funds, have minimal credit risk. The Company’s account receivables are derived primarily from sales to Tier 1 suppliers to the automotive manufacturing industry located mainly in the U.S., Europe, and China. Concentration of credit risk with respect to account receivables is mitigated by credit limits, ongoing credit evaluation, and account monitoring procedures. Credit is granted based on an evaluation of a customer’s financial condition and, generally, collateral is not required. Trade accounts receivable are typically due from customers within 30 to 60 days . The Company performs ongoing credit evaluations of its customers and has not experienced any material losses in the periods presented. The Company establishes credit losses accounts receivable by considering a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history from such customers, and the customers’ current ability to pay its obligation to the Company. As of December 31, 2022 and December 25, 2021, the credit losses for accounts receivable were not material. The Company writes off accounts receivable when they are deemed uncollectible. For the years ended December 31, 2022, December 25, 2021, and December 26, 2020, the charge-offs and recoveries in relation to the credit losses accounts were not material. Customer concentration risk The Company’s business, results of operations, and financial condition for the foreseeable future will likely continue to depend on sales to a relatively small number of customers. In the future, these customers may decide not to purchase the Company’s products, may purchase fewer products than in previous years, or may alter their purchasing patterns. Further, the amount of revenue attributable to any single customer or customer concentration generally may fluctuate in any given period. In addition, a decline in the production levels of one or more of the Company’s major customers, particularly with respect to vehicle models for which the Company is a significant supplier, could reduce revenue. The loss of one or more key customers, a reduction in sales to any key customer or the Company’s inability to attract new significant customers could negatively impact revenue and adversely affect the Company’s business, results of operations, and financial condition. See Note 13 related to customers that accounted for more than 10% of the Company’s total revenue and more than 10% of the total accounts receivable balance for each of the years presented in these consolidated financial statements. Dependence on a single supplier risk The Company purchases all its System on Chip (“EyeQ® SoC”) from a single supplier. Any issues that occur and persist in connection with the manufacture, delivery, quality, or cost of the assembly and testing of inventory could have a material adverse effect on the Company’s business, results of operations and financial condition. See below regarding a shortage in EyeQ® SoCs that the Company has been experiencing during 2021 and 2022. 105 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS COVID-19 The COVID-19 pandemic has adversely affected significant portions of the Company’s business and could have a continued adverse effect on our business, results of operations, and financial condition. There is a significant constraint in the global supply of semiconductors. The COVID-19 pandemic led to an increase in the demand for consumer electronics and global semiconductor manufacturers allocated significant capacity to meet such demand. As global automakers resumed production in 2020 following shutdowns resulting from the COVID-19 pandemic, semiconductor supply became further strained, and these factors, combined with the long lead times associated with the Company, have contributed to a shortage of semiconductors. During the fiscal years ended December 25, 2021 and December 31, 2022, the Company’s sole supplier of EyeQ® SoCs was not able to meet the Company’s demand for EyeQ® SoCs, causing a significant reduction in the Company’s inventory levels. We may continue to experience a shortfall of EyeQ® SoCs and may also experience a shortfall in components of our other products, which has already caused certain delays and may continue to cause further delays in our ability to fulfill customers’ orders. Continued shortage and supply chain constraints in EyeQ® SoCs and in components of our other products, may impair the Company’s ability to meet its customers’ requirements in a timely manner and may adversely affect the Company’s business, results of operations and financial condition. Moreover, to the extent that the global semiconductor shortage results in reduced production or production delays by automakers, those delays could result in reduced or delayed demand for the Company products. In addition, issues relating to the COVID-19 pandemic have led to port congestion and intermittent supplier shutdowns and delays in the delivery of critical components, resulting in additional expenses to expedite delivery of critical parts. Sustaining the proliferation of our solutions will require the readiness and solvency of its suppliers and vendors, a stable and motivated production workforce and ongoing government cooperation, including for travel and visa allowances, which many governments have restricted in connection with efforts to address the COVID-19 pandemic. Although we cannot fully predict the length and the severity of the impact these pressures will have on a long-term basis, we do not anticipate that our current supply chain constraints would materially adversely affect our results of operations, capital resources, sales, profits, and liquidity. New Accounting pronouncements Recently Adopted Accounting Pronouncements: In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s consolidated financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. The new standard which can be applied prospectively or retrospectively, was adopted by the Company, and only impacts annual financial statement footnote disclosures. There was no impact arising from the adoption of this standard. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. ASU No. 2020-04 is effective and can be applied prospectively through December 31, 2022. The Company has completed its evaluation of significant contracts. The Company has adopted the ASU in these consolidated financial statements. There was no material impact on these consolidated financial statements. For further information, see Note 9 regarding related party transactions. NOTE 3 OTHER FINANCIAL STATEMENT DETAILS Inventories ​ 106 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ December 31, December 25, U.S. dollars in millions 2022 2021 Raw materials $ 41 $ 24 Finished goods ​ 72 ​ 73 ​ $ 113 $ 97 ​ Inventory write-downs and write-offs were not material for all periods presented in these consolidated financial statements. Property and equipment, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ December 31, December 25, U.S. dollars in millions 2022 2021 Computers, electronic equipment and software $ 124 $ 85 Vehicles ​ 13 ​ ​ 11 Office furniture and equipment ​ 4 ​ ​ 2 Leasehold improvements ​ 22 ​ ​ 15 Construction in process ​ 302 ​ ​ 249 Total property and equipment, gross ​ 465 ​ ​ 362 Less: accumulated depreciation ​ ( 81 ) ​ ​ ( 58 ) Total property and equipment, net $ 384 $ 304 ​ Depreciation expenses totaled $ 23 million, $ 17 million, and $ 13 million for the years ended December 31, 2022, December 25, 2021, and December 26, 2020, respectively. Substantially all of the Company’s property and equipment were located in Israel as of December 31, 2022 and December 25, 2021. Royalty bearing agreements The Company has entered into a number of license and technology transfer agreements with third parties. The agreements allow the Company to utilize and leverage the third parties’ technology in order to integrate it into the Company’s products. In consideration thereof, the Company is obligated to pay royalties to each of the third parties, for each unit of the applicable integrated product sold to other parties. As a result, during the years ended December 31, 2022, December 25, 2021, and December 26, 2020, the Company recorded expenses of approximately $ 8 million, $ 7 million, and $ 5 million, respectively. These expenses were classified as a component of cost of revenue. NOTE 4 EMPLOYEE BENEFITS In Israel Severance Israeli labor laws generally require severance payments upon dismissal of an employee or upon termination of employment in certain other circumstances. The following principal plans relate to the Company’s employees in Israel. Severance pay liability with respect to Israeli employees is calculated pursuant to Israeli Severance Pay Law based on the most recent salary of the employees, multiplied by the number of years of employment as of the period-end date. The Company records an expense for the increase in its severance liability, net of earnings (losses) from the related severance pay funds. The liabilities are presented on an undiscounted basis and included on the consolidated balance sheets as a long-term employee benefit. Severance pay liabilities as of December 31, 2022 and December 25, 2021 were $ 56 million and $ 68 million, respectively. 107 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company’s liability for all of its Israeli employees is covered for by monthly deposits with severance pay funds. The value of the deposited funds is based on the cash surrender value of these policies and includes earnings (or losses) accumulated through the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to Israeli Severance Pay Law or labor agreements. Severance pay funds, which are included in other long-term assets, were $ 42 million and $ 58 million as of December 31, 2022 and December 25, 2021, respectively. Part of the Company’s liability for severance pay is covered by the provisions of Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employees are entitled to monthly deposits, at a rate of 8.33 % of their monthly salary, contributed by the Company on their behalf to their insurance funds. Payments by the Company in accordance with Section 14 release the Company from any future severance payments in respect of those employees. As a result, the Company does not recognize any liability for severance pay due to these employees under Section 14 and the related deposits are not recorded as assets on the consolidated balance sheets. Other long-term employee benefits Intel has a defined benefit plan for an adaptation grant for certain Intel aligned employees. The adaptation grant includes a salary for three months and may be paid to those employees upon retirement. The benefits under the adaptation grant are calculated based on years of service and pensionable earnings. The vested benefit obligation for a defined benefit plan is the actuarial present value of the vested benefits to which the employee is currently entitled based on the employee’s expected date of separation or retirement. The adaptation grant is not part of Mobileye’s compensation and benefit plans and therefore the related obligation was eliminated through parent net investment upon the recruitment of these Intel Aligned Employees into the Company during 2022. For the years ended December 25, 2021, and December 26, 2020, the periodic benefit costs were $ 2 million, and $ 1 million, respectively, the discount rates were 3.1 % , and 2.9 % , respectively, and the assumed rates of compensation increase were 4.0 % , and 4.2 % , respectively. Projected benefit obligations as of December 25, 2021 were $ 23 million. The accumulated other comprehensive income related to this benefit was not material for all periods presented. Non-Israeli Defined Contribution Plans Most of the Company’s non-Israeli subsidiaries provide defined contribution plans for the benefit of their employees. The plans primarily provide for Company matching contributions based upon a percentage of the employees’ contributions. The Company’s contributions for the years ended December 31, 2022, December 25, 2021, and December 26, 2020 under such plans were not material. NOTE 5 LEASES The Company’s operating leases consist of offices and vehicles and the lease term varies from 3 - 7 years . Some of the Company’s leases include options to extend the lease term for up to five years . For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. During 2022, the Company has entered into new, non-cancellable, operating lease agreements of offices. Lease expenses for operating lease payments are recognized on a straight-line basis over the lease term. Certain operating leases provide for annual increases to lease payments based on an index or rate. The Company calculates the present value of future lease payments based on the index or rate at the lease commencement date. Differences between the estimated lease liability and actual payment are expensed as incurred and are not material for all periods presented. The lease agreements generally do not contain any residual value guarantees or restrictive covenants. Operating lease expense for the years ended December 31, 2022, December 25, 2021, and December 26, 2020 were $ 13 million, $ 11 million, and $ 9 million, respectively. The Company does not have any finance leases. 108 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The balances for the operating leases, which are presented on the consolidated balance sheets in other long-term assets, other current liabilities and long-term liabilities, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ December 31, December 25, U.S. dollars in millions 2022 2021 Operating lease right-of-use assets ​ $ 57 $ 21 Operating lease liabilities: ​ ​ Current portion of lease liabilities ​ 13 ​ 12 Long-term lease liabilities ​ 45 ​ 12 Total operating lease liabilities $ 58 ​ $ 24 ​ As of December 31, 2022 and December 25, 2021, the weighted average remaining lease term was 5.45 and 2.44 years, respectively, and the weighted average discount rate was 4.24 % and 1.77 %, respectively. Supplemental information related to operating leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ December 25, ​ December 26, U.S. dollars in millions ​ 2022 ​ 2021 ​ 2020 Operating cash outflows from operating leases ​ $ 12 ​ $ 12 ​ $ 10 Right-of-use assets recognized in exchange for lease obligations ​ $ 48 ​ $ 4 ​ $ 8 ​ Maturities of operating lease liabilities were as follows: ​ ​ ​ ​ ​ U.S. Dollars in millions December 31, ​ ​ 2022 2023 ​ $ 15 2024 ​ 12 2025 ​ 10 2026 ​ 10 2027 and thereafter ​ 18 Total operating lease payments ​ 65 Imputed interest ​ ( 7 ) Present value of lease liabilities ​ $ 58 ​ During 2017, the Company obtained the right to use land in Jerusalem from the Israeli government for the construction of a new research and development and innovation center that will also host the Company’s headquarters. This land lease was fully prepaid and no lease liability was recorded. This operating lease right of use asset is carried at cost and depreciated using the straight-line method. This operating lease right of use asset, net of depreciation, was $11 million and $ 11 million as of December 31, 2022 and December 25, 2021, respectively, and is included in other long-term assets on the consolidated balance sheets. NOTE 6 EQUITY 1. Common Stock and Voting Rights We have two classes of authorized common stock: Class A common stock, which is listed on Nasdaq under the symbol “MBLY.”, and Class B common stock, which is not listed or traded on any stock exchange and is held by Intel. Both classes of common stock have a par value of $ 0.01 per share. The rights of the holders of our Class A common stock and Class B common stock are identical, except with respect to voting, transfer, and conversion rights. Each share of our Class A common stock is entitled to one vote. Each share of our Class B common stock is entitled to ten votes and is convertible at any time into one share of our Class A common stock, subject to certain conditions. Intel continues to directly, or indirectly, hold all of the Class B common stock of Mobileye, which represents approximately 99.3 % of the voting power of our common stock. For more information on the reorganization and the Mobileye IPO, see Note 1. 109 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. Dividends On May 12, 2022, Mobileye Group declared and paid a dividend in an aggregate amount of $ 336 million to Intel, net of $ 14 million of cash paid to tax authorities to settle related tax obligations. In October 2022, the Company made a capital distribution in cash to Intel in the amount of $ 1.1 million. 3. Share-based compensation plans Mobileye Plan In connection with the Mobileye IPO, the Company approved the Mobileye Global Inc. 2022 Equity Incentive Plan (the “2022 Plan”). In October 2022, the Company’s board of directors approved the issuance of RSUs under the 2022 Plan in an aggregate value of $ 264 million, which constituted 12.6 million RSU units, issuable upon the vesting of such RSUs. RSUs awarded to employees in October 2022, under the 2022 Plan, vest upon the satisfaction of a service-based vesting condition, mostly over a service periods of three years. All RSUs granted are for Class A shares and include service conditions. The RSU granted in October 2022 also include 2.1 million RSUs granted to the Company’s Chief Executive Officer, in a total value of $ 44 million, which will vest over a service period of five years . With respect to Israeli employees, the 2022 Plan is designed to grant awards pursuant to the provision of Section 102 of the Israeli Income Tax Ordinance. In accordance with the capital gains treatment elected by the Company, the Company is not allowed for tax purposes, to deduct the amounts credited to employees. This includes amounts recorded as salary benefits in the Company’s consolidated financial statements, in respect of equity granted to employees under the 2022 Plan, with the exception of the benefit component, if any, on the grant date. Restricted Stock Units The RSU activity for the year ended December 31, 2022 for RSUs granted to Company’s employees under the 2022 Plan was as follows: ​ ​ ​ ​ ​ ​ ​ ​ Weighted average grant ​ ​ Number of RSUs ​ date fair value ​ In thousands U.S. dollars Outstanding as of December 25, 2021 — ​ $ — Granted 12,570 ​ 21 Forfeited (6) ​ 21 Outstanding as of December 31, 2022 12,564 ​ $ 21 ​ As of December 31, 2022, the unrecognized compensation cost related to all unvested RSUs granted under the Company’s 2022 Plan, was $ 211 million, which is expected to be recognized as expense over a weighted-average period of 1.69 years. Intel Plan Prior to the Mobileye IPO, since 2017, employees of the Company had been incentivized and rewarded through the grant of Intel equity awards under the Intel Corporation 2006 Equity Incentive Plan (the “2006 Plan”). The 2006 Plan provides for the grant of equity awards covering Intel common stock to eligible employees of the Company and contain only a service condition. The equity awards granted generally vest over the course of three years from the grant date. With respect to Israeli employees, the 2006 Plan is designed to grant awards pursuant to the provision of Section 102 of the Israeli Income Tax Ordinance. In accordance with the capital gains treatment elected by the Company, the Company is not allowed, for tax purposes to deduct the amounts credited to employees. This includes amounts recorded as salary benefits in the Company’s consolidated 110 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS financial statements, in respect of equity granted to employees under the 2006 Plan, with the exception of the benefit component, if any, on the grant date. Options Outstanding and exercisable options for Intel’s common stock under Intel’s 2006 Plan as of December 31, 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding Exercisable ​ ​ ​ ​ Weighted average ​ Weighted ​ ​ ​ Weighted ​ ​ Number of ​ remaining ​ average ​ Number of ​ average Exercise price options contractual life exercise price options exercise price U.S. dollars In thousands In years U.S. dollars In thousands U.S. dollars $ 4.0 - 21.6 66 2.9 $ 7.6 30 $ 5.8 $ 22.4 - 26.9 2,136 0.6 ​ 26.8 2,136 ​ 26.8 $ 55.2 68 6.3 ​ 55.2 45 ​ 55.2 Total 2,270 0.8 $ 27.1 2,211 $ 27.1 ​ The option activity for the years ended December 31, 2022, December 25, 2021, and December 26, 2020 for options granted to Company’s employees for Intel’s common stock was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ average ​ Weighted ​ Aggregated ​ ​ Number of ​ remaining ​ average ​ intrinsic ​ ​ options ​ contractual Life ​ exercise price ​ value(1) ​ In thousands In years U.S. dollars U.S. dollars in millions Options outstanding as of December 28, 2019 6,594 ​ 3.4 $ 29.1 ​ $ 204 Exercised ( 173 ) ​ — ​ 23.4 ​ — Forfeited ( 30 ) ​ — ​ 19.5 ​ — Options outstanding as of December 26, 2020 6,391 ​ 2.4 ​ 29.2 ​ ​ 114 Exercised ​ ( 2,807 ) ​ — ​ ​ 29.3 ​ ​ — Forfeited ​ ( 6 ) ​ — ​ ​ 24.5 ​ ​ — Options outstanding as of December 25, 2021 ​ 3,578 ​ 1.5 ​ ​ 29.2 ​ ​ 79 Exercised ​ ( 1,308 ) ​ — ​ ​ 32.8 ​ ​ — Options outstanding as of December 31, 2022 2,270 ​ 0.8 $ 27.1 ​ $ 1 Options exercisable as of December 31, 2022 ​ 2,211 ​ 0.8 ​ $ 27.1 ​ $ 1 ​ (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of the Intel’s common stock. On December 31, 2022, December 25, 2021, and December 26, 2020, the Intel share prices were $ 26.43 , $ 51.31 , and $ 47.07 , respectively. This represents the potential pre-tax amount receivable by the option holders had all option holders exercised their options as of such date. (2) The remaining options expected to vest as of December 31, 2022 were 59 thousand options with an average weighted exercise price of $ 26.6 . 111 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS RSUs The RSU activity for the years ended December 31, 2022, December 25, 2021, and December 26, 2020 for RSUs granted to Company’s employees for Intel’s common stock was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average grant ​ ​ Number of RSUs ​ date fair value ​ In thousands U.S. dollars Outstanding as of December 28, 2019 2,371 ​ $ 43.2 Granted 3,628 ​ 44.4 Vested ( 1,588 ) ​ 42.0 Forfeited ( 72 ) ​ 47.4 Outstanding as of December 26, 2020 4,339 ​ 44.6 Granted ​ 2,935 ​ ​ 47.8 Vested ​ ( 1,761 ) ​ ​ 44.0 Forfeited ​ ( 235 ) ​ ​ 46.4 Outstanding as of December 25, 2021 ​ 5,278 ​ ​ 46.5 Granted ​ 3,758 ​ ​ 43.7 Vested ​ ( 2,935 ) ​ ​ 45.9 Forfeited ​ ( 409 ) ​ ​ 48.1 Outstanding as of December 31, 2022 ​ 5,692 ​ $ 44.8 ​ Unrecognized expenses As of December 31, 2022, the unrecognized compensation cost related to stock options and RSUs granted under the Intel 2006 Plan was $ 197 million, which will be recognized over a weighted average period of 1.26 years. Share-based compensation expense summary (for both Mobileye and Intel Plans) Expenses recognized Share-based compensation expenses included in the consolidated statements of operations and comprehensive income (loss) were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended U.S. dollars in millions December 31, December 25, December 26, ​ ​ 2022 ​ 2021 ​ 2020 Cost of revenue $ 2 $ 1 $ — Research and development, net ​ ​ 153 ​ 77 ​ 67 Sales and marketing ​ 5 ​ 4 ​ 3 General and administrative ​ 14 ​ 15 ​ 15 Total share-based compensation ​ $ 174 ​ $ 97 ​ $ 85 ​ ​ ​ NOTE 7 EARNINGS (LOSS) PER SHARE Before the Mobileye IPO, Intel held directly or indirectly 100 shares of common stock of Mobileye, with a par value of $ 0.01 per share, that were issued and outstanding . Immediately prior to the Mobileye IPO, those 100 shares of common stock held by Intel were reclassified into 100 shares of Class B common stock with a par value of $ 0.01 per share. Concurrently, we issued to Intel an additional 749,999,900 shares of our Class B common stock pursuant to an agreement with Intel. Accordingly, as of the completion of the Mobileye IPO, we have 750,000,000 Class B shares, all held by Intel. Per ASC 260-10-55-12, this share amount is being retroactively utilized for the calculation of basic and diluted earnings (loss) per share (“EPS”) for all periods presented. 112 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In connection with the Mobileye IPO, we issued 41,000,000 shares of our Class A common stock to the public at a public offering price of $ 21 per share and an additional 4,761,905 Class A shares at a private placement. The Mobileye IPO closed on October 28, 2022. On November 1, 2022, we closed the sale of an additional 6,150,000 shares pursuant to the exercise of the underwriters’ over-allotment option. In accordance with ASC 260, the Class A shares issued in connection with the Mobileye IPO are included in earnings (loss) per share calculations for periods subsequent to the closing of the Mobileye IPO and are not included in the earnings (loss) per share calculations for periods prior to the closing of the Mobileye IPO. In October 2022, our board of directors approved the issuance of restricted stock units in connection with the Mobileye IPO. For the year ended December 31, 2022, the computation of diluted earnings (loss) per share attributable to common stockholders does not include 0.8 million potential common stock, based on treasury stock method, related to these restricted stock units, as the effect of their inclusion would have been anti-dilutive. The following table summarizes the calculation of basic and diluted earnings (loss) per share for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ December 25, ​ December 26, In millions, except per share amounts 2022 2021 2020 ​ ​ ​ Numerator: ​ ​ ​ ​ Net income (loss) $ ( 82 ) $ ( 75 ) $ ( 196 ) Denominator: ​ ​ ​ Weighted average common shares - basic and diluted ​ 759 ​ 750 ​ 750 Earnings (loss) per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic and diluted ​ $ ( 0.11 ) ​ $ ( 0.10 ) ​ $ ( 0.26 ) ​ ​ NOTE 8 INCOME TAXES Loss before income taxes included in the consolidated statements of operations and comprehensive income (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ December 31, December 25, December 26, U.S. dollars in millions 2022 2021 2020 Income (loss) before taxes: ​ ​ ​ U.S $ ( 49 ) ​ $ ( 96 ) ​ $ ( 77 ) Non-U.S ​ 17 ​ 39 ​ ( 135 ) Total income (loss) before income taxes $ ( 32 ) ​ $ ( 57 ) ​ $ ( 212 ) ​ 113 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Benefit (provision) for income taxes included in the consolidated statements of operations and comprehensive income (loss) Benefit (provision) for income taxes for the years ended December 31, 2022, December 25, 2021, and December 26, 2020 was comprised of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, December 25, December 26, U.S. dollars in millions 2022 2021 2020 Current income taxes: ​ ​ ​ ​ ​ ​ U.S $ — ​ $ — ​ $ — Non-U.S ​ ( 67 ) ​ ( 47 ) ​ ( 37 ) Total current provision for income taxes ​ ( 67 ) ​ ​ ( 47 ) ​ ​ ( 37 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred income taxes: ​ ​ ​ U.S. ​ ( 28 ) ​ ​ ( 30 ) ​ ​ — Non-U.S. ​ 45 ​ 59 ​ 53 Total deferred benefit (provision) for income taxes ​ 17 ​ ​ 29 ​ ​ 53 Total benefit (provision) for income taxes $ ( 50 ) ​ $ ( 18 ) ​ $ 16 ​ Effective income tax rate reconciliation The difference between the tax provision at the statutory federal income tax rate and the benefit (provision) for income taxes as a percentage of loss before income taxes (effective tax rate) for each year was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ December 31, December 25, December 26, ​ ​ 2022 ​ 2021 ​ 2020 ​ ​ % Statutory federal income tax rate ​ 21.0 ​ 21.0 ​ 21.0 Increase (reduction) in rate resulting from: ​ ​ ​ ​ ​ ​ Foreign rate differential ​ ( 1.2 ) ​ ( 1.9 ) ​ 0.5 Technology incentives – current ​ 312.7 ​ 183.1 ​ 28.2 Technology incentives – deferred ​ ( 230.6 ) ​ ( 116.4 ) ​ ( 29.1 ) U.S. branch taxation of foreign operations ​ ( 127.3 ) ​ ( 54.4 ) ​ — Decrease (increase) in uncertain tax position, net ​ 16.1 ​ ( 0.3 ) ​ 0.2 Share-based compensation related adjustments ​ ( 0.5 ) ​ ( 13.7 ) ​ ( 4.1 ) Increase in valuation allowance ​ ( 151.9 ) ​ ( 50.0 ) ​ ( 7.7 ) Non-deductible expenses and other ​ ( 6.5 ) ​ 1.0 ​ ( 1.5 ) Withholding taxes, net of credit ​ 12.1 ​ — ​ — Effective tax rate ​ ( 156.1 ) ​ ( 31.6 ) ​ 7.5 ​ In the year ended December 25, 2021, Mobileye’s Israeli operations became taxable in the U.S. as branch entities. In the year ended December 31, 2022, Moovit’s Israeli operations became taxable in the United States as a branch entity. As a result, these operations are taxed both in the U.S. and locally in Israel. For U.S. tax purposes, due to cumulative losses, deferred tax assets have not been benefited which results in a residual tax expense associated with a deferred tax liability recorded for goodwill. The increase in the effective tax rate for the year ended December 31, 2022, as compared to the year ended December 25, 2021, is primarily driven by the increase in unbenefited U.S. deferred tax assets subject to a valuation allowance. In Israel, the Company benefits from a reduced tax rate under the Special Preferred Technological Enterprise status under the Law for the Encouragement of Capital Investments, 1959, or the Investment Law. Under the Investment Law, income derived by Preferred Companies from ‘Special Preferred Technological Enterprises’ (as defined in the 2017 Amendment), would be subject to 6 % tax rate on income deriving from intellectual property, subject to a number of conditions being fulfilled, including a minimal amount or ratio of annual research and development expenditures and research and 114 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS development employees, as well as having at least 25 % of annual income derived from exports. Special Preferred Technological Enterprise is defined as an enterprise which meets the aforementioned conditions and for which total consolidated revenue of its parent company and all subsidiaries are more than ILS10 billion. Deferred income taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax liabilities and assets are classified as long term on the consolidated balance sheets. Due to the fact that certain Israeli operations became taxable in the U.S. as branch activities, the Company recognized in the year ended December 31, 2022 and December 25, 2021 the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for U.S. income tax purposes which resulted in a net deferred tax liability after evaluation of deferred tax assets for realizability. Significant components of the Company’s deferred tax assets and deferred tax liabilities were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 25, U.S. dollars in millions ​ 2022 ​ 2021 Deferred tax assets: ​ ​ Share-based compensation $ 89 ​ $ 80 Provisions for employee benefits ​ 7 ​ ​ 8 Net operating losses carryforward ​ 142 ​ ​ 198 Research and development expenses ​ 283 ​ ​ 105 Operating lease liabilities ​ 13 ​ ​ — Foreign tax credit and deferrals ​ 33 ​ ​ — Intangible assets ​ 147 ​ ​ — Other ​ 3 ​ ​ — Gross deferred tax assets ​ 717 ​ ​ 391 Valuation allowance ​ ( 533 ) ​ ​ ( 229 ) Total deferred tax assets ​ 184 ​ ​ 162 Deferred tax liabilities: ​ ​ ​ ​ ​ Intangible assets ​ ( 161 ) ​ ​ ( 181 ) Goodwill ​ ​ ( 172 ) ​ ​ ( 152 ) Right of use assets ​ ​ ( 13 ) ​ ​ — Total deferred tax liabilities ​ ​ ( 346 ) ​ ​ ( 333 ) Net deferred tax liabilities $ ( 162 ) ​ $ ( 171 ) ​ Changes in valuation allowance for deferred tax assets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, December 25, December 26, U.S. dollars in millions 2022 2021 2020 Valuation allowance at beginning of year $ 229 ​ $ — ​ $ — Additions ​ — ​ 185 ​ — Change in valuation allowance ​ 304 ​ 44 ​ — Valuation allowance at end of year $ 533 ​ $ 229 ​ $ — ​ Realization of deferred tax assets is based on the Company’s judgment and various factors including reversal of deferred tax liabilities, the ability to generate future taxable income in jurisdictions where such assets have arisen, and potential tax planning strategies. A valuation allowance is recorded in order to reduce the deferred tax assets to the amount expected to be realized in the future. The valuation allowance for the years presented are primarily related to U.S. branch deferred tax assets not currently expected to be realized given that the Company has sustained recent losses based on the separate return method. 115 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For purposes of these financial statements, the income tax expense and deferred tax balances have been prepared as if the Company filed income tax returns on the separate return method. As of December 31, 2022, the Company has U.S. net operating loss carryforwards of $ 144 million, subject to separate return limitation year rules, which were generated before the Company joined its Parent’s consolidated income tax return on July 17, 2021. The Company also has $ 352 million of separate return method net operating loss carryforwards that were generated after joining its Parent’s consolidated income tax filing group which have been utilized by its Parent. These net operating losses generated by the Company that have been utilized as part of the Parent consolidated income tax return filings but have not been utilized by the Company under the separate return method approach, have been reflected in these consolidated financial statements because the Company will recognize a benefit for the separate return method net operating losses when determined to be realizable, whether as a deduction against current taxable income in future periods or upon recognition of associated deferred tax assets based on valuation allowance assessments. The majority of the Company’s U.S. net operating losses were generated after January 1, 2018 and thus have an unlimited carry-forward period but are limited as a deduction to 80% of taxable income in any given year. The Company has a non-U.S. net operating loss carryforward of $ 157 million for the year ended December 31, 2022. This net operating loss carryforward amount relates primarily to operations in Israel and has an indefinite carry-forward period. The Company intends to indefinitely reinvest undistributed foreign earnings into foreign operations and expects future U.S. cash generated to be sufficient to meet future U.S. cash needs. Therefore, the Company has not provided for deferred income taxes on undistributed foreign earnings. In making this determination, the Company evaluates both near-term and long-term fiscal needs of its U.S. domestic operations and its foreign subsidiaries. The estimation of the unrecognized deferred tax liability on undistributed foreign earnings is not practicable for the consolidated balance sheets dates presented. The Company made a one-time dividend distribution of $ 336 million to its Parent as part of Mobileye IPO, which was subject to Israel withholding tax of $ 14 million. Uncertain tax positions A reconciliation of the beginning and ending amount of unrecognized tax benefits related to uncertain tax positions was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, December 25, December 26, U.S. dollars in millions 2022 2021 2020 Balance at the beginning of the year $ 4 $ 4 $ 5 Settlements with taxing authorities ​ — ​ — ​ ( 1 ) Lapse of statute of limitations ​ ( 4 ) ​ — ​ — Balance at the end of the year $ — ​ $ 4 ​ $ 4 ​ As of December 31, 2022, the Company had no liabilities for uncertain tax positions. The December 25, 2021 balance of $ 4 million, plus accrued penalties and interest, is included in other current liabilities on the consolidated balance sheets. There are no material changes anticipated in the uncertain tax positions in the next twelve months. The Company files income tax returns in the U.S., Israel, and in other certain foreign jurisdictions. The Company is no longer subject to U.S. and Israeli tax examinations for years prior to 2019 and 2017, respectively. NOTE 9 RELATED PARTY TRANSACTIONS The Company has entered into a series of related party arrangements with Intel. The arrangements were as follows: 1. Loan arrangements The Company entered into a series of bilateral lending/borrowing arrangements with Intel. The purposes of the facilities are to enable bilateral cash movements between the parties. The arrangements are denominated in U.S dollars. In 2017, Intel along with the Company, entered into a bilateral lending/borrowing arrangement (“Arrangement 1”) to make available to either party up to an aggregate principal amount of $ 1.5 billion. Arrangement 1 has a mechanism of automatic renewal for additional periods of one year . In 2021, Arrangement 1 was amended to increase the capacity from $ 1.5 billion to $ 1.8 billion, and was automatically renewed to December 2022. On October 25, 2022, Arrangement 1 was terminated. 116 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In 2017, Intel along with the Company, entered into a bilateral lending/borrowing arrangement (“Arrangement 2”) to make cash available to either party up to an aggregate principal amount of $ 750 million. Arrangement 2 has a mechanism for automatic renewal for additional periods of one year each. In March 2022, Arrangement 2 was amended to increase the aggregate principal amount from $ 750 million to $ 1.0 billion and the maturity date was extended to March 2023. In March 2023, Arrangement 2 was terminated. In March 2022, due to reference rate reform, Arrangement 1 and Arrangement 2 were amended to change the interest rate from LIBOR based to SOFR based. The modification was accounted for as if it is not substantial in accordance with the expedient for ASC 470 and an updated effective interest rate was calculated to reflect the change in terms. There was no gain or loss recognized for the year ended December 31, 2022. In 2021, the Company and Intel entered into a bilateral lending/borrowing arrangement (“Arrangement 3” and together with Arrangement 1 and Arrangement 2, the “Bilateral Loan Arrangements”) to make cash available to either party up to an aggregate principal amount of $ 100 million. Arrangement 3 has a maturity date of July 2022 with a mechanism of automatic renewal for additional periods of one year . In March 2022, Arrangement 3 was amended to increase the aggregate principal amount available to draw from $ 100 million to $ 500 million. The interest rate is based on an applicable margin of 0.0 % with an option for Intel to elect to increase or decrease the applicable margin on or after the first day of the 2022 fiscal year. If the election to increase the applicable margin is applied, the spread adjustment would be reflective of the difference between three-month LIBOR and the term Secured Overnight Financing Rate (“SOFR”). On October 25, 2022, Arrangement 3 was terminated. The total outstanding balance under the Bilateral Loan Arrangements was zero and $ 1.3 billion as of December 31, 2022 and December 25, 2021 respectively, and was reflected in current assets as a related party loan (accumulated interest is presented within other current assets). Interest income recognized by the Company totaled $ 18 million, $ 3 million and $ 6 million for the year ended December 31, 2022, December 25, 2021 and December 26, 2020, respectively. 2. Stock Compensation Recharge Agreement The Company entered into a stock compensation recharge agreement with Intel, which requires the Company to reimburse Intel for certain amounts relating to the value of share-based compensation provided to the Company’s employees for RSUs or stock options exercisable in Intel stock. The liability associated with the stock compensation recharge agreement that is reflected on the consolidated balance sheets, under related party payable was approximately $ 1 million and $ 162 million as of December 31, 2022 and December 25, 2021, respectively. The reimbursement amounts recorded as an adjustment to additional paid-in capital in the consolidated statement of equity were $ 118 million, $ 162 million and $ 78 million for the year ended December 31, 2022, December 25, 2021 and December 26, 2020, respectively. As for the inclusion of the Company’s employees in Intel’s equity incentive plan, see Note 6. 3. Hedging services Intel centrally hedges its exposure to changes in foreign exchange rates. At the beginning of 2021, the Company entered into a hedging services agreement with Intel, pursuant to which the Company is entitled to a certain allocation of the gains and obligated to a certain allocation of the losses arising from the execution of the hedging contracts. In October 2022, we de-designated our outstanding hedge instruments and will no longer participate in the hedging services agreement with Intel. As of October 25, 2022, the Company is no longer a party to this agreement. For further information, see Note 2, significant accounting policies related to Derivatives and hedging. 4. Development services Intel entered into agreements with the Company to provide certain development services, including research, technical work on technology, products and solutions, construction and ancillary administrative services. The Company paid for these services on a quarterly basis. These costs are included in the consolidated statements of operations and comprehensive income (loss) primarily on a specific and direct attribution basis, as described in Note 2. Following our recruitment of certain employees relating to the Mobileye business from Intel during 2022, and the Intercompany Agreements that came into effect upon Mobileye IPO, this agreement was terminated on October 25, 2022. 117 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. Lease agreements Under lease agreements with Intel, the Company leases office space in Intel’s buildings. The costs are included in the consolidated statements of operations and comprehensive income (loss) primarily on a specific and direct attribution basis, as described in Note 2. The leasing costs for the years ended December 31, 2022, December 25, 2021 and December 26, 2020 were $ 3 million, $ 1.5 million and $ 1.5 , respectively. 6. Other services to a related party The Company reimbursed its Chief Executive Officer for reasonable travel related expenses incurred while conducting business on behalf of the Company. For the years ended December 31, 2022, December 25, 2021, and December 26, 2020, travel related reimbursements were $ 1.0 million, $ 1.1 million and $ 0.5 million, respectively. 7. Reorganization and the Mobileye IPO In connection with the Mobileye IPO, which was completed in October 2022, we have consummated the following transactions and agreements. Equity transaction in connection with the legal purchase of Moovit entities On May 31, 2022, we entered into an agreement with Intel pursuant to which we legally purchased from Intel 100 % of the issued and outstanding equity interests of the Moovit entities for an aggregate amount of $ 900 million that was paid in December 2022 to Intel using cash that we concurrently received from Intel’s payment of such amount it owed us under the Bilateral Loan Arrangements. Moovit’s operations were already reflected as part of the Mobileye Group as further detailed in Note 1 and, therefore the transaction was treated within equity. Dividend Note On April 21, 2022, Intel and Mobileye Group signed a loan agreement whereby Mobileye Group issued a promissory note to Intel in an aggregate principal amount of $ 3.5 billion (the “Dividend Note”). The Dividend Note was scheduled to mature on April 21, 2025 and accrued interest at a rate equal to 1.26 % per annum, such interest to accrue quarterly. Prior to June 30, 2024, such interest would be paid by being automatically added to the outstanding principal amount of the loan and would thereafter be payable quarterly in cash in arrears and shall also be payable upon any prepayment, whether in whole or in part, to the extent accrued on the amount being prepaid and upon maturity. Under the Dividend Note, Mobileye Group had the right, at its option, on any business day, to prepay the loan, including principal and any accrued interest thereon, in whole or in part without premium or penalty. In November 2022, the Company used approximately $ 0.9 billion out of the net proceeds from the Mobileye IPO to repay a portion of the indebtedness under the Dividend Note and Intel has contributed to the Company the remaining portion of the Dividend Note (plus related accrued interest) in the amount of $ 2.6 billion such that no amounts under the Dividend Note remain owed by us to Intel as of December 31, 2022. Interest expense recognized by the Company totaled $ 24 million for the year ended December 31, 2022. Contribution and Subscription Agreement In connection with the Mobileye IPO, we entered into the Contribution and Subscription Agreement with Intel, pursuant to which Intel transferred to Mobileye Global Inc., collectively as a contribution on existing capital in exchange for 749,999,900 shares of our Class B common stock: (i) 100 % of the equity interests of Cyclops Holdings Corporation, such that Cyclops Holdings Corporation became a direct, wholly owned subsidiary of Mobileye Global Inc.; and (ii) the Dividend Note with respect to any principal and accrued interest thereon in excess of the principal amount that we repaid out of the net proceeds that we received from the Mobileye IPO and the Concurrent Private Placement. After the completion of the Mobileye IPO and the Concurrent Private Placement, no amounts under the Dividend Note remain owed by us to Intel. The actual amount of the Dividend Note which was repaid was based upon the amount of net proceeds from the Mobileye IPO that were available after we retained the required $ 1.0 billion of cash, cash equivalents, or marketable securities that Intel agreed to ensure that we had immediately after completion of the IPO under the Master Transaction Agreement. 118 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Intercompany Agreements In connection with the Mobileye IPO, the Company entered into certain intercompany agreements (collectively, the “Intercompany Agreements”), including a Master Transaction Agreement, an Administrative Services Agreement, an Employee Matters Agreement, a Technology and Services Agreement, a LiDAR Product Collaboration Agreement, and a Tax Sharing Agreement, in each case with Intel and certain of its subsidiaries, to outline a framework for the Company’s ongoing relationship with Intel, whereby, among other matters, Intel will continue to provide certain administrative and operational services, including the supply and license of certain technologies, whereby the Company will supply Intel with certain technologies, and whereby Intel’s and the Company’s respective rights, responsibilities and obligations with respect to all tax matters will be governed (including tax liabilities, tax attributes, tax returns and tax audits). The Intercompany Agreements became effective as of the completion of the Mobileye IPO. See below for further detail. Administrative Services Agreement Under the Administrative Services Agreement, Intel will provide the Company with administrative, financial, legal, tax, and other services. The Company will pay fees to Intel for the services rendered based on pricing per service agreed between the Company and Intel. The initial term of the Administrative Services Agreement will expire two years from the completion of the Mobileye IPO and will be extended automatically for successive three-month terms unless one of the parties elects not to renew. We have the right to terminate any of the services provided by Intel under the Administrative Services Agreement at any time upon thirty days’ prior written notice of termination to Intel, or if Intel fails to perform any of its material obligations under the Administrative Services Agreement and such failure continues for at least thirty days after receipt by Intel of written notice of such failure from Mobileye. The costs incurred under this agreement for the year ended December 31, 2022 was $ 3 million. Technology and Services Agreement The Technology and Services Agreement provides a framework for the collaboration on technology projects and services between the Company and Intel (“Technology Projects”), and sets out the licenses granted by each party to its respective technology for the conduct of the Technology Projects, provisions relating to the ownership of certain existing technology, the allocation of rights in any new technology created in the course of the Technology Projects, and certain provisions applicable to the development of a certain radar product of the Company’s. The Technology and Services Agreement will not apply to projects for the development and manufacture of a Lidar sensor system for automobiles, for which the LiDAR Product Collaboration Agreement will apply. Pursuant to the Technology and Services Agreement, the Company and Intel will agree to statements of work with additional terms for Technology Projects. The Technology and Services Agreement has a term of two years, and will automatically renew for one-year renewal periods, unless the agreement is terminated for a party’s material breach, a party’s bankruptcy or insolvency, or advance notice of non-renewal is given. The amount incurred under this agreement for the year ended December 31, 2022 was $ 0.4 million. LiDAR Product Collaboration Agreement The LiDAR Product Collaboration Agreement provides the terms that will apply to the Company’s collaboration with Intel for the development and manufacture of a Lidar sensor system for ADAS and AV in automobiles (“LiDAR Projects”). On some of the LiDAR programs joint funding will apply between Intel and Mobileye until the end of 2027 so Mobileye will bear its own Lidar sensor system development costs up to the first USD $ 40 million per year and Intel will bear up to $ 20 million per year of Mobileye’s Lidar sensor system development costs that are greater than USD $ 40 million per year. The LiDAR Product Collaboration Agreement further provides that Intel will manufacture certain components for us to market and sell as part of a FMCW (frequency-modulated continuous wave) Lidar sensor system solely for external environment sensing for ADAS and AV in automobiles. The parties intend that for a limited period of up to 5 years, we will have certain exclusive rights for the marketing and selling of the initial FMCW Lidar sensor system for defined uses, with annual plans for sales and marketing of the sensor system to be agreed by the parties. 119 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The price for the components Intel will manufacture for us will be based on a cost-plus model. In addition, the agreement also includes a profit-sharing model under which Mobileye will pay Intel a share of the gross profit for each LiDAR sensor system or components thereof, based on Intel technology, sold by Mobileye. The LiDAR Product Collaboration Agreement has a term of ten years subject to automatic 24-month renewal periods unless notice of non-renewal is given. Either party may terminate the LiDAR Product Collaboration Agreement for any reason by giving 24-month notice to the other party, and additional termination rights arise if Intel shuts down, sells, or transfers the factory operations for silicon photonics or if we cease Lidar development or sale, as well as for a party’s material breach or bankruptcy or insolvency. There were no amounts received or receivable from Intel under this agreement for the year ended December 31, 2022. Tax Sharing Agreement The Tax Sharing Agreement establishes the respective rights, responsibilities and obligations of the Company and Intel after the completion of the Mobileye IPO with respect to tax matters, including the amount of cash the Company will pay to Intel for its share of the tax liability owed on the consolidated filings in which the Company or any of the Company’s subsidiaries are included, audit or other tax proceedings. As of December 31, 2022, the related party payable to Intel, pursuant to the Tax Sharing Agreement, was $ 34 million. For further detail, see Note 8 Income Taxes . NOTE 10 BUSINESS COMBINATION In May 2020, Moovit, a leading urban mobility app and mobility-as-a-service solutions provider, was acquired for total consideration of $ 915 million. An amount of $ 90 million was retained to be paid to Moovit’s former shareholders after 18 months in order to cover any potential indemnities that arise in the first 18 months post-acquisition. It was determined that the payment of all the deferred acquisition consideration to Moovit’s former stockholders was probable, and therefore, the total of $ 90 million was included in purchase consideration as a liability incurred to the sellers. This deferred acquisition consideration was fully paid to Moovit’s former shareholders in 2021. Total consideration includes the previously held ownership by Intel of 6 % of Moovit originally acquired in 2018 and was contributed by Intel to the Company. The fair value of goodwill and intangible assets recognized in connection with the Moovit acquisition was $ 604 million and $ 340 million, respectively. The intangible assets were comprised of $ 286 million of developed technology and $ 54 million of customer relationships and brands. Out of the $ 604 million goodwill arising from the Moovit Acquisition, $ 493 million was attributed to synergies and benefits that are expected to be generated from the collaboration between Mobileye and Moovit. Substantially all of the goodwill will not be deductible for tax purposes in Israel. The acquisition-related developed technology is primarily related to Moovit’s monthly active user base and application platform. The acquisition related costs were not material to these consolidated financial statements. NOTE 11 GOODWILL The following table presents the carrying amount of goodwill by segment as of December 31, 2022 and December 25, 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ December 31, December 25, U.S. dollars in millions 2022 2021 Mobileye ​ $ 10,784 ​ $ 10,784 Other ​ ​ 111 ​ ​ 111 Total ​ $ 10,895 ​ $ 10,895 ​ During the fourth quarters of 2022 and 2021, we completed our annual impairment assessments, which for 2022 was based on qualitative factors, and concluded that it is not more likely than not that the fair value of each reporting unit is less than its carrying amount. In the year ended December 25, 2021, we performed a quantitative assessment for one of our reporting units. The Company did not record any impairment of goodwill for any of the periods presented. 120 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 IDENTIFIED INTANGIBLE ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ December 31, 2022 ​ December 25, 2021 ​ Gross Accumulated ​ Gross Accumulated ​ U.S. dollars in millions Assets Amortization Net Assets Amortization Net Developed technology $ 3,973 ​ $ 1,870 ​ $ 2,103 ​ $ 3,991 $ 1,419 $ 2,572 Customer relationships & brands ​ ​ 786 ​ ​ 362 ​ ​ 424 ​ ​ 831 ​ ​ 332 ​ ​ 499 Total ​ $ 4,759 ​ $ 2,232 ​ $ 2,527 ​ $ 4,822 ​ $ 1,751 ​ $ 3,071 ​ Amortization expenses recorded for developed technology and customer relationships and brands were recorded in cost of revenue and sales and marketing, respectively, in the consolidated statements of operations and comprehensive income (loss) for each year presented. The Company did not record any impairment of intangible assets for any of the periods presented. The following table presents the amortization expenses recorded for these identified intangible assets and their weighted average useful lives: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average U.S. dollars in millions December 31, 2022 December 25, 2021 December 26, 2020 Useful Life Developed technology $ 469 ​ $ 419 $ 368 10 Customer relationships & brands ​ 75 ​ ​ 90 ​ 82 12 Total amortization expenses $ 544 ​ $ 509 $ 450 ​ ​ The Company expects future amortization expenses for the next five years and thereafter to be as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. dollars in millions 2023 2024 2025 2026 2027 Thereafter Total Future Amortization Expenses ​ $ 474 $ 445 $ 443 $ 332 $ 179 $ 654 $ 2,527 ​ ​ NOTE 13 SEGMENT INFORMATION An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision- making group, to evaluate performance and make operating decisions. The Company has identified its CODM as the Chief Executive Officer (“CEO”). The Company’s organizational structure and management reporting supports two operating segments: Mobileye and Moovit. The CODM evaluates performance, makes operating decisions and allocates resources based on the financial data of these operating segments. Operating segments do not record inter-segment revenue. Mobileye is the Company’s only reportable operating segment and Moovit is presented within “Other” as per ASC 280, Segment Reporting. Segment performance is the operating income reported excluding the amortization of acquisition-related intangible assets and IPO related expense. The measure of assets has not been disclosed for each segment as it is not regularly reviewed by the CODM. The accounting policies of the individual segments are the same as those described in the summary of significant accounting policies in Note 2 to these consolidated financial statements. 121 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following is segment results for each year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Amounts not ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ allocated to ​ ​ ​ U.S. dollars in millions Mobileye Other segments Consolidated Revenues $ 1,843 ​ $ 26 ​ $ — ​ $ 1,869 Cost of revenues ​ 473 ​ ​ 5 ​ ​ 469 ​ ​ 947 Research and development, net ​ 747 ​ ​ 42 ​ ​ — ​ ​ 789 Sales and marketing ​ 34 ​ ​ 11 ​ ​ 75 ​ ​ 120 General and administrative ​ 34 ​ ​ 12 ​ ​ 4 ​ ​ 50 Segment performance $ 555 ​ $ ( 44 ) ​ $ ( 548 ) ​ $ ( 37 ) Interest income (expense) with related party ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 6 ) Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 11 Loss before taxes on income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 32 ) Share-based compensation ​ 158 ​ ​ 16 ​ ​ — ​ ​ 174 Depreciation of property and equipment ​ 23 ​ ​ — ​ ​ — ​ ​ 23 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 25, 2021 ​ ​ ​ ​ ​ ​ ​ Amounts not ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ allocated to ​ ​ ​ U.S. dollars in millions Mobileye Other segments Consolidated Revenues $ 1,363 $ 23 $ — $ 1,386 Cost of revenues ​ 308 ​ 4 ​ 419 ​ 731 Research and development, net ​ 505 ​ 39 ​ — ​ 544 Sales and marketing ​ 30 ​ 14 ​ 90 ​ 134 General and administrative ​ 21 ​ 13 ​ — ​ 34 Segment performance $ 499 $ ( 47 ) $ ( 509 ) $ ( 57 ) Interest income (expense) with related party ​ ​ ​ ​ 3 Other income (expense) ​ ​ ​ ​ ( 3 ) Loss before taxes on income ​ ​ ​ ​ ( 57 ) Share-based compensation ​ 85 ​ 12 ​ — ​ 97 Depreciation of property and equipment ​ 17 ​ — ​ — ​ 17 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 26, 2020 ​ ​ ​ ​ ​ Amounts not ​ ​ ​ ​ ​ ​ ​ allocated to ​ ​ U.S. dollars in millions Mobileye Other segments Consolidated Revenues $ 956 ​ $ 11 ​ $ — ​ $ 967 Cost of revenues ​ 221 ​ ​ 2 ​ ​ 368 ​ ​ 591 Research and development, net ​ 417 ​ ​ 23 ​ ​ — ​ ​ 440 Sales and marketing ​ 26 ​ ​ 8 ​ ​ 82 ​ ​ 116 General and administrative ​ 28 ​ ​ 5 ​ ​ — ​ ​ 33 Segment performance $ 264 ​ $ ( 27 ) ​ $ ( 450 ) ​ $ ( 213 ) Interest income (expense) with related party ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 5 ) Loss before taxes on income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 212 ) Share-based compensation ​ 82 ​ ​ 3 ​ ​ — ​ ​ 85 Depreciation of property and equipment ​ 13 ​ ​ — ​ ​ — ​ ​ 13 ​ 122 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Total revenues based on the country that the product was shipped to were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ December 31, December 25, ​ December 26, U.S. dollars in millions 2022 2021 2020 China $ 551 ​ $ 270 ​ $ 134 USA ​ 472 ​ ​ 363 ​ ​ 254 Germany ​ 268 ​ ​ 263 ​ ​ 153 United Kingdom ​ 221 ​ ​ 198 ​ ​ 161 South Korea ​ 115 ​ ​ 107 ​ ​ 96 Singapore ​ 25 ​ ​ 42 ​ ​ 41 Hungary ​ 87 ​ ​ 66 ​ ​ 67 Poland ​ ​ 69 ​ ​ 24 ​ ​ 6 Rest of World ​ 61 ​ ​ 53 ​ ​ 55 Total $ 1,869 ​ $ 1,386 ​ $ 967 ​ We generate the majority of our revenue from the sale of our EyeQ® SoCs to OEMs through sales to Tier 1 automotive suppliers. EyeQ® SoC sales represented approximately 89 %, 94 %, and 93 % of our revenue for each of the years ended December 31, 2022, December 25, 2021 and December 26, 2020, respectively. Major Customers Revenue from major customers that amount to 10% or more of total revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, December 25, December 26, ​ ​ 2022 2021 2020 Percent of total revenues Customer A ​ 38 % 35 % 35 % Customer B ​ 18 % 19 % 13 % Customer C ​ 15 % 17 % 17 % Customer D ​ * ​ * ​ 10 % Customer E ​ * ​ * ​ 10 % ​ *Less than 10% Accounts receivable balances of major customers that amount to 10% or more of total accounts receivable balance: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, December 25, ​ ​ 2022 2021 Percent of total accounts receivables balance ​ ​ Customer A ​ 32 % 32 % Customer B ​ 19 % 30 % Customer C ​ 25 % 16 % ​ ​ NOTE 14 SUBSEQUENT EVENTS In January 2023, the company's compensation committee approved the issuance of restricted stock units to be issued under our 2022 Equity Incentive Plan. The total aggregate fair value of RSUs granted was $ 9.8 million, which constituted of 253 thousand RSUs, which will vest over a service period of three years. ​ ​ 123 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures [None.]