Silicon Investor (SI) -- The First Internet Community

INTEL CORPORATION
CONSOLIDATED SUMMARY STATEMENT OF INCOME DATA
(In millions, except per share amounts)

Three Months Ended Twelve Months Ended
Dec. 25, Dec. 26, Dec. 25, Dec. 26,
2010 2009 2010 2009
NET REVENUE $ 11,457 $ 10,569 $ 43,623 $ 35,127
Cost of sales 3,727 3,729 14,808 15,566
GROSS MARGIN 7,730 6,840 28,815 19,561

Research and development 1,671 1,603 6,576 5,653
Marketing, general and administrative 1,705 1,468 6,309 5,234
R&D AND MG&A 3,376 3,071 12,885 10,887
AMD settlement - 1,250 - 1,250
European Commission fine - - - 1,447
Restructuring and asset impairment charges - 3 - 231
Amortization of acquisition-related intangibles 7 19 18 35
OPERATING EXPENSES 3,383 4,343 12,903 13,850
OPERATING INCOME 4,347 2,497 15,912 5,711
Gains (losses) on equity investments, net 109 91 348 (170)
Interest and other, net 31 5 109 163
INCOME BEFORE TAXES 4,487 2,593 16,369 5,704
Provision for taxes 1,099 311 4,697 1,335
NET INCOME $ 3,388 $ 2,282 $ 11,672 $ 4,369

BASIC EARNINGS PER COMMON SHARE $ 0.61 $ 0.41 $ 2.10 $ 0.79
DILUTED EARNINGS PER COMMON SHARE $ 0.59 $ 0.40 $ 2.05 $ 0.77

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
BASIC 5,554 5,522 5,555 5,557
DILUTED 5,698 5,650 5,696 5,645

INTEL CORPORATION
CONSOLIDATED SUMMARY BALANCE SHEET DATA
(In millions)

Dec. 25, Sept. 25, Dec. 26,
2010 2010 2009
CURRENT ASSETS
Cash and cash equivalents $ 5,498 $ 5,517 $ 3,987
Short-term investments 11,294 9,470 5,285
Trading assets 5,093 5,763 4,648
Accounts receivable, net 2,867 2,911 2,273
Inventories:
Raw materials 471 380 437
Work in process 1,928 1,634 1,469
Finished goods 1,425 1,409 1,029
3,824 3,423 2,935
Deferred tax assets 1,397 1,233 1,216
Other current assets 1,590 1,182 813
TOTAL CURRENT ASSETS 31,563 29,499 21,157

Property, plant and equipment, net 17,899 17,189 17,225
Marketable equity securities 1,008 1,054 773
Other long-term investments 3,026 3,482 4,179
Goodwill 4,531 4,481 4,421
Other long-term assets 5,111 4,883 5,340
TOTAL ASSETS $ 63,138 $ 60,588 $ 53,095

CURRENT LIABILITIES
Short-term debt $ 38 $ 259 $ 172
Accounts payable 2,290 1,903 1,883
Accrued compensation and benefits 2,888 2,270 2,448
Accrued advertising 1,007 1,017 773
Deferred income on shipments to distributors 622 626 593
Other accrued liabilities 2,225 2,762 1,722
TOTAL CURRENT LIABILITIES 9,070 8,837 7,591

Long-term income taxes payable 190 174 193
Long-term debt 2,077 2,073 2,049
Long-term deferred tax liabilities 927 681 555
Other long-term liabilities 1,236 1,127 1,003
Stockholders' equity:
Preferred stock — — —
Common stock and capital in excess of par value 16,178 16,096 14,993
Accumulated other comprehensive income (loss) 333 531 393
Retained earnings 33,127 31,069 26,318
TOTAL STOCKHOLDERS' EQUITY 49,638 47,696 41,704
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 63,138 $ 60,588 $ 53,095

INTEL CORPORATION
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In millions)

Q4 2010 Q3 2010 Q4 2009
GEOGRAPHIC REVENUE:
Asia-Pacific $ 6,514 $ 6,404 $ 5,964
57% 58% 57%
Americas $ 2,296 $ 2,240 $ 2,088
20% 20% 20%
Europe $ 1,582 $ 1,326 $ 1,524
14% 12% 14%
Japan $ 1,065 $ 1,132 $ 993
9% 10% 9%

CASH INVESTMENTS:
Cash and short-term investments $ 16,792 $ 14,987 $ 9,272
Trading assets - marketable debt securities (1) 4,705 5,341 4,648
Total cash investments $ 21,497 $ 20,328 $ 13,920

TRADING ASSETS:
Trading assets - equity securities (2) $ 388 $ 422 $ —
Total trading assets - sum of 1+2 $ 5,093 $ 5,763 $ 4,648

SELECTED CASH FLOW INFORMATION:
Depreciation $ 1,146 $ 1,086 $ 1,172
Share-based compensation $ 213 $ 224 $ 200
Amortization of intangibles $ 60 $ 56 $ 89
Capital spending $ (1,869) $ (1,362) $ (1,081)
Investments in non-marketable equity instruments $ (151) $ (73) $ (85)
Stock repurchase program $ (1,500) $ — $ —
Proceeds from sales of shares to employees, tax benefit & other $ 54 $ 150 $ 36
Dividends paid $ (879) $ (877) $ (774)
Net cash received/(used) for divestitures/acquisitions $ (148) $ — $ —

EARNINGS PER COMMON SHARE INFORMATION:
Weighted average common shares outstanding - basic 5,554 5,575 5,522
Dilutive effect of employee equity incentive plans 92 67 77
Dilutive effect of convertible debt 52 52 51
Weighted average common shares outstanding - diluted 5,698 5,694 5,650

STOCK BUYBACK:
Shares repurchased 70 — —
Cumulative shares repurchased (in billions) 3.4 3.4 3.4
Remaining dollars authorized for buyback (in billions) $ 4.2 $ 5.7 $ 5.7

OTHER INFORMATION:
Employees (in thousands) 82.5 81.7 79.8

INTEL CORPORATION
SUPPLEMENTAL OPERATING GROUP RESULTS
($ in millions)

Three Months Ended Twelve Months Ended
Q4 2010 Q4 2009 Q4 2010 Q4 2009
Net Revenue
PC Client Group
Microprocessor revenue $ 6,348 $ 5,881 $ 24,721 $ 19,914
Chipset, motherboard and other revenue 1,682 1,877 6,877 6,261
8,030 7,758 31,598 26,175
Data Center Group
Microprocessor revenue 2,165 1,703 7,361 5,301
Chipset, motherboard and other revenue 357 323 1,332 1,149
2,522 2,026 8,693 6,450

Other Intel architecture group 497 410 1,784 1,402
Intel architecture group revenue 11,049 10,194 42,075 34,027

Other operating groups 392 367 1,501 970
Corporate 16 8 47 130
TOTAL NET REVENUE $ 11,457 $ 10,569 $ 43,623 $ 35,127

Operating income (loss)
PC Client Group $ 3,620 $ 3,340 $ 13,628 $ 7,585
Data Center Group 1,426 972 4,395 2,299
Other Intel architecture group (13) 12 (60) (179)
Intel architecture group operating income 5,033 4,324 17,963 9,705

Other operating groups (75) (22) (159) (284)
Corporate (611) (1,805) (1,892) (3,710)
TOTAL OPERATING INCOME $ 4,347 $ 2,497 $ 15,912 $ 5,711

INTEL CORPORATION
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS

In addition to disclosing financial results calculated in accordance with United States (U.S.)
generally accepted accounting principles (GAAP), this earnings release contains non-GAAP
financial measures that exclude the charge incurred in the fourth quarter of 2009 as a result of
the settlement agreement with Advanced Micro Devices, Inc. (AMD) in the amount of $1.25 billion,
and a charge incurred in the second quarter of 2009 as a result of the European Commission (EC)
fine in the amount of €1.06 billion, or about $1.45 billion. These non-GAAP measures also
exclude the associated impacts of the AMD settlement on our tax provision. The EC fine did not
impact the income tax provision because it was not tax deductible.

The non-GAAP financial measures disclosed by the company should not be considered a substitute
for, or superior to, financial measures calculated in accordance with GAAP, and the financial
results calculated in accordance with GAAP and reconciliations from these results should be
carefully evaluated. Management believes the non-GAAP financial measures are appropriate for
both its own assessment of, and to show the reader, how our performance compares to other
periods. Set forth below are reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures.

In the GAAP results in this earnings release the AMD settlement charge is presented separately
within operating expenses for the three and twelve months ended December 26, 2009 and the EC
fine charge is presented separately within operating expenses for the twelve months ended
December 26, 2009.
(In millions, except per-share amounts)
Three Months Ended Twelve Months Ended
Dec 25, Dec 26, Dec 25, Dec 26,
2010 2009 2010 2009

GAAP OPERATING INCOME $ 4,347 $ 2,497 $ 15,912 $ 5,711
Adjustment for
AMD settlement - 1,250 - 1,250
EC fine - - - 1,447
OPERATING INCOME EXCLUDING ADJUSTMENTS $ 4,347 $ 3,747 $ 15,912 $ 8,408

GAAP NET INCOME $ 3,388 $ 2,282 $ 11,672 $ 4,369
Adjustment for
AMD settlement - 1,250 - 1,250
EC fine - - - 1,447
Income tax impacts - (438) - (438)
NET INCOME EXCLUDING ADJUSTMENTS $ 3,388 $ 3,094 $ 11,672 $ 6,628

GAAP DILUTED EARNINGS PER COMMON SHARE $ 0.59 $ 0.40 $ 2.05 $ 0.77
Adjustment for
AMD settlement - 0.22 - 0.22
EC fine - - - 0.26
Income tax impacts - (0.07) - (0.08)
DILUTED EARNINGS PER COMMON SHARE
EXCLUDING ADJUSTMENTS
$ 0.59 $ 0.55 $ 2.05 $ 1.17