EXHIBIT 99.1
INTEL REPORTS RECORD ANNUAL REVENUE AND EPS
Fourth Quarter Earnings Excluding Acquisition-Related Costs* $0.38 per share
Fourth Quarter Earnings Per Share $0.32
SANTA CLARA, Calif., Jan. 16, 2001 -- Intel Corporation today announced
revenue for 2000 of $33.7 billion, up 15 percent from 1999, resulting in the
company's fourteenth consecutive year of revenue growth. Fourth quarter
revenue was $8.7 billion, up 6 percent from the fourth quarter of 1999, and
approximately flat with the third quarter of 2000.
*Acquisition-related costs consist of one-time write-offs of purchased in-
process research and development and the ongoing amortization of goodwill and
other acquisition-related intangibles and costs. Intangibles include, for
example, the value of the acquired companies' developed technology,
trademarks and workforce-in-place. Earnings excluding acquisition-related
costs differ from earnings presented according to generally accepted
accounting principles because they exclude these costs.
For 2000, net income excluding acquisition-related costs was $12.1
billion, up 49 percent from $8.1 billion in 1999. For 2000, earnings
excluding acquisition-related costs were $1.73 per share, an increase of 48
percent from $1.17 in 1999.
Including acquisition-related costs in accordance with generally
accepted accounting principles, net income in 2000 was $10.5 billion, up 44
percent from $7.3 billion in 1999. For 2000, earnings per share were $1.51,
up 44 percent from $1.05 in 1999.
Acquisition-related costs in 2000 consisted of $109 million in one-time
charges for purchased in-process research and development and $1.6 billion of
amortization of goodwill and other acquisition-related intangibles and costs.
For the fourth quarter, net income excluding acquisition-related costs
was $2.6 billion, up 10 percent from the fourth quarter of 1999 and down 9
percent sequentially. Fourth quarter earnings excluding acquisition-related
costs were $0.38 per share, an increase of 12 percent from $0.34 in the
fourth quarter of 1999, and down 7 percent sequentially.
Including acquisition-related costs in accordance with generally accepted
accounting principles, fourth quarter net income was $2.2 billion, up 4
percent from fourth quarter 1999 and down 13 percent sequentially. Earnings
per share were $0.32, up 7 percent from $0.30 in the fourth quarter of 1999
and down 11 percent sequentially.
Acquisition-related costs in the fourth quarter consisted of $18 million
in one-time charges for purchased in-process research and development and
$459 million of amortization of goodwill and other acquisition-related
intangibles and costs.
"This was a year of record annual revenue and earnings; yet, slowing
economic conditions impacted fourth quarter growth and are causing near-term
uncertainty," said Craig R. Barrett, president and chief executive officer.
"Looking forward, we are confident in our business strategy and competitive
position," he continued. "Our financial strength enables us aggressively to
increase our current investments in capital and R&D spending to ensure future
leadership and readiness with 0.13-micron process manufacturing, 300 mm
technology and a strong product portfolio."
During the quarter, the company announced the acquisition of the
consulting group of Network Solutions Private Ltd. and closed the previously
announced acquisition of Ziatech
Corporation. In 2000, the company acquired 16 companies and businesses for
over $2.7 billion, primarily focused on expanding the company's networking,
communications and wireless businesses.
During the quarter, the company paid its quarterly cash dividend of
$0.02 per share. The dividend was paid on Dec. 1, 2000, to stockholders of
record on Nov. 7, 2000. Intel has paid a regular quarterly cash dividend for
over eight years.
During the quarter, the company repurchased a total of 22.8 million
shares of common stock, at a cost of $1.0 billion, under an ongoing program.
For the year, the company repurchased a total of 73.5 million shares at a
total cost of $4.0 billion. Since the program began in 1990, the company has
repurchased 1.4 billion shares at a total cost of $22.2 billion.
BUSINESS OUTLOOK
----------------
THE FOLLOWING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS. THESE
STATEMENTS ARE FORWARD-LOOKING, AND ACTUAL RESULTS MAY DIFFER MATERIALLY.
THESE STATEMENTS DO NOT INCLUDE THE POTENTIAL IMPACT OF ANY MERGERS,
ACQUISITIONS OR OTHER BUSINESS COMBINATIONS THAT MAY BE COMPLETED AFTER DEC.
30, 2000.
CURRENT NEGATIVE TRENDS IN GLOBAL ECONOMIC CONDITIONS MAKE IT PARTICULARLY
DIFFICULT AT PRESENT TO PREDICT PRODUCT DEMAND AND OTHER RELATED MATTERS.
** The company's best estimate given the high level of economic uncertainty
is that revenue for the first quarter of 2001 will be down 15 percent, plus
or minus several points, from fourth quarter revenue of $8.7 billion, due to
seasonal factors and the impact of slowing worldwide economies.
** Gross margin percentage in the first quarter of 2001 is expected to be 58
percent, plus or minus a couple of points, down from 63 percent in the fourth
quarter primarily due to lower
revenue. The company's expectation for gross margin percentage for 2001 is
uncertain at this time, however, it is the company's goal to at least equal
first quarter gross margin percentage for the full year. In the short term,
Intel's gross margin percentage varies primarily with revenue levels, product
mix, changes in unit costs and timing of factory ramps and associated costs.
** Expenses (R&D, excluding in-process R&D, plus MG&A) in the first quarter
of 2001 are expected to be approximately flat with fourth quarter expenses of
$2.4 billion. The company continues to invest heavily in R&D for its future
product roadmap and expansion into new networking and communications
businesses. Expenses may vary from this expectation depending in part on the
level of revenue and profits.
** R&D spending, excluding in-process R&D, is expected to be approximately
$4.3 billion in 2001, up from $3.9 billion in 2000. The higher R&D spending
is primarily for next generation manufacturing technology and product
development.
** Capital spending for 2001 is expected to be approximately $7.5 billion, up
from $6.7 billion in 2000. Despite near term uncertainty, the company will
use its financial strength to invest for the future in key areas such as
0.13-micron process technology which will enable the company to produce new
and more powerful microprocessors beginning later this year, and 300 mm
process technology which is expected to lead to microprocessor unit cost
reductions of approximately 30 percent in 2002 and beyond.
** The company expects gains from investments and interest and other income
for the first quarter of 2001 to be approximately $180 million. This
expectation assumes no net gains from the sale of equity investments, and
will vary depending on equity market levels and volatility, the realization
of expected gains on investments, including gains on investments acquired by
third parties, interest rates, cash balances, mark-to-market of derivative
instruments and assuming no unanticipated items
** The tax rate for 2001 is expected to be approximately 30.3 percent,
excluding the impact of acquisition-related costs, down from 31.8 percent in
2000, primarily due to a change in the expected distribution of earnings
among various tax jurisdictions.
** Depreciation is expected to be approximately $880 million in the first
quarter, and $4.0 billion for the full year 2001.
** Amortization of goodwill and other acquisition-related intangibles and
costs is expected to be approximately $455 million in the first quarter, and
$1.8 billion for the full year 2001.
The statements by Craig R. Barrett and the above statements contained in
this Outlook are forward-looking statements that involve a number of risks
and uncertainties. In addition to factors discussed above, among other
factors that could cause actual results to differ materially are the
following: business and economic conditions and growth in the computing
industry in various geographic regions; changes in customer order patterns;
changes in the mixes of microprocessor types and speeds, purchased components
and other products; competitive factors, such as rival chip architectures and
manufacturing technologies, competing software-compatible microprocessors and
acceptance of new products in specific market segments; pricing pressures;
development and timing of introduction of compelling software applications;
insufficient, excess or obsolete inventory and variations in inventory
valuation; continued success in technological advances, including development
and implementation of new processes and strategic products for specific
market segments; execution of the manufacturing ramp; the ability to grow
new networking, communications, wireless and other Internet-related
businesses and successfully integrate and operate any acquired businesses;
impact of events outside the United States such as the business impact of
fluctuating currency rates or unrest or political instability in a locale,
such as unrest in Israel; unanticipated costs or other adverse effects
associated with processors and other products containing errata (deviations
from published specifications); litigation involving antitrust, intellectual
property, consumer and other issues; and other risk factors listed from time
to time in the company's SEC reports, including but not limited to the report
on Form 10-Q for the quarter ended Sept. 30, 2000 (Part I, Item 2, Outlook
section).
STATUS OF BUSINESS OUTLOOK AND RELATED RISK FACTORS STATEMENTS
Intel expects that its corporate representatives will meet privately
during the quarter with investors, the media, investment analysts and others.
At these meetings Intel may reiterate the
Outlook published in this press release. At the same time, Intel will keep
this press release and Outlook publicly available on its Web site
(www.intc.com). Prior to the start of the Quiet Period (described below), the
public can continue to rely on the Outlook on the Web site as still being
Intel's current expectations on matters covered, unless Intel publishes a
notice stating otherwise.
Beginning Mar. 17, 2001, Intel will observe a "Quiet Period" during
which the Outlook as provided in this press release and the company's
quarterly report on Form 10-Q no longer constitute the company's current
expectations. During the Quiet Period, the Outlook in these documents should
be considered to be historical, speaking as of prior to the Quiet Period only
and not subject to update by the company. During the Quiet Period, Intel
representatives will not comment concerning Outlook or Intel's financial
results or expectations. The Quiet Period will extend until the day when
Intel's next quarterly Earnings Release is published, presently scheduled for
April 17, 2001.
INTEL CORPORATION
CONSOLIDATED SUMMARY INCOME STATEMENT DATA
(In millions, except per share amounts)
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 30 Dec. 25 Dec. 30 Dec. 25
2000 1999 2000 1999
------- ------- ------- -------
NET REVENUE $ 8,702 $ 8,212 $33,726 $29,389
------- ------- ------- -------
Cost of sales 3,230 3,176 12,650 11,836
Research and development 998 877 3,897 3,111
Marketing, general and administrative 1,421 1,105 5,089 3,872
Amortization of goodwill and other
acquisition-related intangibles and costs 459 241 1,586 411
Purchased in-process research and
development 18 59 109 392
------- ------- ------- -------
Operating costs and expenses 6,126 5,458 23,331 19,622
------- ------- ------- -------
OPERATING INCOME 2,576 2,754 10,395 9,767
Gains on investments 450 327 3,759 883
Interest and other 349 181 987 578
------- ------- ------- -------
INCOME BEFORE TAXES 3,375 3,262 15,141 11,228
Income taxes 1,182 1,154 4,606 3,914
------- ------- ------- -------
NET INCOME $ 2,193 $ 2,108 $10,535 $ 7,314
======= ======= ======= =======
BASIC EARNINGS PER SHARE $ 0.33 $ 0.32 $ 1.57 $ 1.10
======= ======= ======= =======
DILUTED EARNINGS PER SHARE $ 0.32 $ 0.30 $ 1.51 $ 1.05
======= ======= ======= =======
COMMON SHARES OUTSTANDING 6,723 6,673 6,709 6,648
COMMON SHARES ASSUMING DILUTION 6,938 6,969 6,986 6,940
Note: Certain prior period amounts have been reclassified to conform with the
current presentation.
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PRO FORMA INFORMATION EXCLUDING
ACQUISITION-RELATED COSTS
The following pro forma supplemental information excludes the effect of
amortization of goodwill and other acquisition-related intangibles and costs
as well as in-process research and development. This pro forma information is
not prepared in accordance with generally accepted accounting principles.
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 30 Dec. 25 Dec. 30 Dec. 25
2000 1999 2000 1999
------- ------- ------- -------
Pro forma operating costs and expenses $ 5,649 $ 5,158 $21,636 $18,819
Pro forma operating income $ 3,053 $ 3,054 $12,090 $10,570
Net income excluding acquisition-related
costs $ 2,627 $ 2,397 $12,082 $ 8,098
Basic earnings per share excluding
acquisition-related costs $ 0.39 $ 0.36 $ 1.80 $ 1.22
Diluted earnings per share excluding
acquisition-related costs $ 0.38 $ 0.34 $ 1.73 $ 1.17
INTEL CORPORATION
CONSOLIDATED SUMMARY BALANCE SHEET DATA
(In millions)
Dec. 30, Sept. 30, Dec. 25,
2000 2000 1999
--------- --------- ---------
CURRENT ASSETS
Cash and short-term investments $ 13,823 $ 14,007 $ 11,788
Accounts receivable 4,129 4,574 3,700
Inventories:
Raw materials 384 334 183
Work in process 1,057 926 755
Finished goods 800 676 540
--------- --------- ---------
2,241 1,936 1,478
Deferred tax assets and other 957 993 853
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Total current assets 21,150 21,510 17,819
Property, plant and equipment, net 15,013 13,414 11,715
Marketable strategic equity securities 1,915 4,548 7,121
Other long-term investments 1,797 1,770 790
Goodwill and other acquisition-related
intangibles 5,941 6,163 4,934
Other assets 2,129 1,608 1,470
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TOTAL ASSETS $ 47,945 $ 49,013 $ 43,849
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CURRENT LIABILITIES
Short-term debt $ 378 $ 336 $ 230
Accounts payable and accrued liabilities 6,305 6,087 4,565
Deferred income on shipments to
distributors 674 716 609
Income taxes payable 1,293 1,386 1,695
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Total current liabilities 8,650 8,525 7,099
LONG-TERM DEBT 707 610 955
DEFERRED TAX LIABILITIES 1,266 2,173 3,130
PUT WARRANTS - - 130
STOCKHOLDERS' EQUITY
Common stock and capital in excess
of par value 8,486 8,643 7,316
Other stockholders' equity 28,836 29,062 25,219
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Total stockholders' equity 37,322 37,705 32,535
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 47,945 $ 49,013 $ 43,849
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