Intel Fourth-Quarter Revenue $9.7 Billion
-- Operating Income $1.5 Billion
-- EPS 26 Cents
-- Record Microprocessor and Flash Unit Sales
-- Record Mobile and Server Microprocessor Revenue
SANTA CLARA, Calif.--(BUSINESS WIRE)--
Intel Corporation today announced fourth-quarter revenue of $9.7 billion, operating income of $1.5 billion, net income of $1.5 billion and earnings per share (EPS) of 26 cents. Excluding the effects of share-based compensation, the company posted operating income of $1.8 billion, net income of $1.7 billion and EPS of 30 cents.
Fourth-quarter results included a gain from the sale of certain assets of the company's communications and application processor business to Marvell Technology Group partially offset by impairments, including an impairment for the related decision to place the company's Fab 23 facility in Colorado Springs, Colo., up for sale. The gain and impairments resulted in a net increase to EPS of approximately 2.5 cents. Fourth-quarter restructuring charges related to the company's structure and efficiency program were in line with the company's expectations and decreased EPS by approximately 1.5 cents.
"Intel's product and technology leadership yielded a strong fourth quarter with higher selling prices and record unit shipments in the fastest growing segments of the market," said Intel President and CEO Paul Otellini.
GAAP Results (including the effects of share-based compensation)
----------------------------------------------------------------------
Q4 2006 vs. Q4 2005 vs. Q3 2006
----------------------------------------------------------------------
Revenue $9.7 billion -5% +11%
----------------------------------------------------------------------
Operating Income $1.5 billion -55% +8%
----------------------------------------------------------------------
Net Income $1.5 billion -39% +15%
----------------------------------------------------------------------
EPS 26 cents -35% +18%
----------------------------------------------------------------------
Note: GAAP results for 2005 do not include the effects of share-based
compensation. Results for the third quarter of 2006 included the
effects of gains and charges that resulted in a net increase to EPS
of 1.5 cents. Results for the fourth quarter of 2006 included the
effects of a gain as well as restructuring and asset impairment
charges that resulted in a net increase to EPS of approximately 1
cent.
----------------------------------------------------------------------
Non-GAAP Results (excluding the effects of share-based compensation)
----------------------------------------------------------------------
Q4 2006 vs. Q4 2005 vs. Q3 2006
----------------------------------------------------------------------
Operating Income $1.8 billion -45% +7%
----------------------------------------------------------------------
Net Income $1.7 billion -29% +12%
----------------------------------------------------------------------
EPS 30 cents -25% +11%
----------------------------------------------------------------------
Note: GAAP results for 2005 do not include the effects of share-based
compensation. Results for the third quarter of 2006 included the
effects of gains and charges that resulted in a net increase to EPS
of 1.5 cents. Results for the fourth quarter of 2006 included the
effects of a gain as well as restructuring and asset impairment
charges that resulted in a net increase to EPS of approximately 1
cent.
----------------------------------------------------------------------
For 2006, Intel achieved revenue of $35.4 billion, operating income of $5.7 billion, net income of $5 billion and EPS of 86 cents. Intel paid record cash dividends of $2.3 billion and used $4.6 billion to repurchase 226.6 million shares of common stock.
2006 2005 Change
----------------------------------------------------------------------
Revenue $35.4 billion $38.8 billion -9%
----------------------------------------------------------------------
Operating Income $5.7 billion $12.1 billion -53%
----------------------------------------------------------------------
Net Income $5 billion $8.7 billion -42%
----------------------------------------------------------------------
EPS 86 cents $1.40 -39%
----------------------------------------------------------------------
Financial Review
Fourth-quarter gross margin was 49.6 percent, as compared to 49.1 percent in the third quarter. Gross margin included the positive impact of higher microprocessor units and selling prices that were partially offset by higher factory underutilization charges along with flash memory write-downs and NAND start-up costs. The company used $150 million for share repurchases and announced the approval of a 12.5 percent increase in the quarterly cash dividend to 11.25 cents per share beginning with the dividend expected to be declared in the first quarter of 2007.
Structure and Efficiency Review
In September, the company announced decisions and targets resulting from a structure and efficiency analysis. The company ended 2006 with a workforce of 94,100 people, lower than 102,500 in the second quarter of 2006 and slightly below the target of 95,000 people. The company is on track to generate spending and manufacturing cost savings of approximately $2 billion in 2007 exclusive of restructuring costs.
Key Product Trends (Sequential)
-- Total microprocessor units set a record. The ASP was higher,
driven primarily by a mix shift to leading-edge processors in
all segments along with growth in mobile as a percentage of
the PC microprocessor mix.
-- Chipset units were flat.
-- Motherboard units were lower.
-- Flash memory units set a record.
Fourth-Quarter Sales Patterns
Revenue was higher in all regions and greater than the seasonal average in the Asia-Pacific and Americas regions.
Q4 2006 vs. Q4 2005 vs. Q3 2006
----------------------------------------------------------------------
Asia-Pacific $4.9 billion -5% +13%
----------------------------------------------------------------------
Americas $2 billion +9% +6%
----------------------------------------------------------------------
EMEA $1.9 billion -17% +18%
----------------------------------------------------------------------
Japan $936 million -1% +1%
----------------------------------------------------------------------
Recent Events
-- Intel completed the development of its next-generation 45nm
process technology which is scheduled for production in the
second half of 2007, ramping to three 300mm factories in 2008.
Intel also produced samples of Penryn, the company's first
45nm processor, and booted the Windows Vista(1), Mac OS X(1),
Windows XP(1) and Linux operating systems using first silicon.
-- In the fourth quarter, new records were set for total
microprocessor unit sales as well as server, mobile and flash
unit sales. Server and mobile microprocessor revenue also
exceeded previous records.
-- The company shipped more than 70 million 65nm microprocessors
during 2006 and ramped dual-core technology to greater than 50
percent of fourth-quarter shipments.
-- Intel launched the industry's first quad-core microprocessors
for volume servers and PCs, further extending the performance
records established by the Intel(R) Core(TM)
microarchitecture. The company is now shipping nine different
quad-core processors for servers, workstations and PCs,
including a new Intel(R) Core(TM)2 Quad processor for
mainstream PCs.
-- Since launch, Intel's dual- and quad-core processors based on
the Intel Core microarchitecture have received more than 50
awards from publications and magazine editors worldwide.
-- Apple(1) announced a new Apple TV product that uses a
low-power Intel processor and chipset to help stream premium
music, TV shows, movies and photos from personal computers to
widescreen TVs. DirecTV introduced an HD-DVR player that
allows music and pictures stored on Intel(R) Viiv(TM) brand
PCs to be wirelessly transmitted to TVs.
-- Intel demonstrated its first mobile WiMAX silicon which is
being designed into solutions that will give future laptops
and mobile devices broadband access over both WiFi and WiMAX
networks, automatically seeking the best available
connections.
-- Intel began volume shipments of the industry's first 65nm NOR
flash chips featuring multi-level cell technology that stores
two bits of data in each transistor. The new flash chip
provides cell phone designers with a gigabit of storage for
data such as megapixel-quality photos and MPEG-4 video clips.
Business Outlook and Risk Factors Regarding Forward-Looking Statements
The following expectations do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after Jan. 15.
Q1 2007 Outlook
-- Revenue: Expected to be between $8.7 billion and $9.3 billion.
-- Gross margin: 49 percent, plus or minus a couple of points.
-- Spending (R&D plus MG&A): Between $2.6 billion and $2.7
billion. In addition, the company expects a first-quarter
restructuring charge of approximately $50 million.
-- Net gains from equity investments and interest and other:
Approximately $130 million.
-- Tax rate: Approximately 30 percent.
-- Depreciation: Between $1.2 billion and $1.3 billion.
2007 Outlook
-- Gross margin: 50 percent, plus or minus a few points.
-- R&D: Approximately $5.4 billion.
-- MG&A: Approximately $5.3 billion.
-- Capital spending: $5.5 billion plus or minus $200 million. The
forecast includes significantly higher equipment spending for
the ramp of Intel's next-generation 45nm process technology
that will be more than offset by savings in a variety of
areas.
-- Tax rate: Approximately 30 percent.
-- Depreciation: $4.8 billion plus or minus $100 million.
The above statements and any others in this document that refer to plans and expectations for the first quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. Many factors could affect Intel's actual results, and variances from Intel's current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the factors set forth below to be the important factors that could cause actual results to differ materially from the Corporation's published expectations:
-- Intel operates in intensely competitive industries that are
characterized by a high percentage of costs that are fixed or
difficult to reduce in the short term, significant pricing
pressures, and product demand that is highly variable and
difficult to forecast. Revenue and the gross margin percentage
are affected by the timing of new Intel product introductions
and the demand for and market acceptance of Intel's products;
actions taken by Intel's competitors, including product
offerings, marketing programs and pricing pressures and
Intel's response to such actions; Intel's ability to respond
quickly to technological developments and to incorporate new
features into its products; and the availability of sufficient
components from suppliers to meet demand. Factors that could
cause demand to be different from Intel's expectations include
customer acceptance of Intel and competitors' products;
changes in customer order patterns, including order
cancellations; changes in the level of inventory at customers;
and changes in business and economic conditions.
-- The gross margin percentage could vary significantly from
expectations based on changes in revenue levels; product mix
and pricing; capacity utilization; variations in inventory
valuation; excess or obsolete inventory; manufacturing yields;
changes in unit costs; impairments of long-lived assets,
including manufacturing, assembly/test and intangible assets;
and the timing and execution of the manufacturing ramp and
associated costs, including start-up costs.
-- Expenses, particularly certain marketing and compensation
expenses, vary depending on the level of demand for Intel's
products, the level of revenue and profits and impairments of
long-lived assets.
-- Intel is in the midst of a structure and efficiency program
which is resulting in several actions that could have an
impact on expected expense levels and gross margin.
-- The tax rate expectation is based on current tax law and
current expected income and assumes Intel continues to receive
tax benefits for export sales. The tax rate may be affected by
the closing of acquisitions or divestitures; the jurisdictions
in which profits are determined to be earned and taxed;
changes in the estimates of credits, benefits and deductions;
the resolution of issues arising from tax audits with various
tax authorities; and the ability to realize deferred tax
assets.
-- Gains or losses from equity securities and interest and other
could vary from expectations depending on equity market levels
and volatility; gains or losses realized on the sale or
exchange of securities; impairment charges related to
marketable, non-marketable and other investments; interest
rates; cash balances; and changes in fair value of derivative
instruments.
-- Dividend declarations and the dividend rate are at the
discretion of Intel's board of directors, and plans for future
dividends may be revised by the board. Intel's dividend and
stock buyback programs could be affected by changes in its
capital spending programs, changes in its cash flows and
changes in the tax laws, as well as by the level and timing of
acquisition and investment activity.
-- Intel's results could be affected by the amount, type, and
valuation of share-based awards granted as well as the amount
of awards cancelled due to employee turnover and the timing of
award exercises by employees.
-- Intel's results could be impacted by unexpected economic,
social, political and physical/infrastructure conditions in
the countries in which Intel, its customers or its suppliers
operate, including military conflict and other security risks,
natural disasters, infrastructure disruptions, health concerns
and fluctuations in currency exchange rates.
-- Intel's results could be affected by adverse effects
associated with product defects and errata (deviations from
published specifications), and by litigation or regulatory
matters involving intellectual property, stockholder,
consumer, antitrust and other issues, such as the litigation
and regulatory matters described in Intel's SEC reports.
A more detailed discussion of these and other factors that could affect Intel's results is included in Intel's SEC filings, including the report on Form 10-Q for the quarter ended Sept. 30.
Status of Business Outlook
During the quarter, Intel's corporate representatives may reiterate the Business Outlook during private meetings with investors, investment analysts, the media and others. From the close of business on March 2 until publication of the company's first-quarter 2007 earnings release, Intel will observe a "Quiet Period" during which the Business Outlook disclosed in the company's press releases and filings with the SEC should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to update by the company.
Earnings Webcast
Intel will hold a public webcast at 2:30 p.m. PST today on its Investor Relations Web site at www.intc.com, with a replay available until Jan. 30.
Intel, the world leader in silicon innovation, develops technologies, products and initiatives to continually advance how people work and live. Additional information about Intel is available at www.intel.com/pressroom.
Intel, the Intel logo, Intel Core and Intel Viiv are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries.
(1) Other names and brands may be claimed as the property of others.
INTEL CORPORATION
CONSOLIDATED SUMMARY INCOME STATEMENT DATA
(In millions, except per share amounts)
Three Months Ended Twelve Months Ended
----------------------- -----------------------
Dec. 30, Dec. 31, Dec. 30, Dec. 31,
2006 2005 2006 2005
----------- ----------- ----------- -----------
NET REVENUE $9,694 $10,201 $35,382 $38,826
Cost of sales 4,884 3,901 17,164 15,777
----------- ----------- ----------- -----------
GROSS MARGIN 4,810 6,300 18,218 23,049
----------- ----------- ----------- -----------
Research and
development 1,426 1,362 5,873 5,145
Marketing, general and
administrative 1,434 1,606 6,096 5,688
Restructuring and asset
impairment 457 - 555 -
Amortization of
acquisition-related
intangibles and costs 5 23 42 126
----------- ----------- ----------- -----------
OPERATING EXPENSES 3,322 2,991 12,566 10,959
----------- ----------- ----------- -----------
OPERATING INCOME 1,488 3,309 5,652 12,090
Gains (losses) on
equity securities, net 7 (25) 214 (45)
Interest and other, net 632 178 1,202 565
----------- ----------- ----------- -----------
INCOME BEFORE TAXES 2,127 3,462 7,068 12,610
Income taxes 626 1,009 2,024 3,946
----------- ----------- ----------- -----------
NET INCOME $1,501 $2,453 $5,044 $8,664
=========== =========== =========== ===========
BASIC EARNINGS PER
SHARE $0.26 $0.41 $0.87 $1.42
=========== =========== =========== ===========
DILUTED EARNINGS PER
SHARE $0.26 $0.40 $0.86 $1.40
=========== =========== =========== ===========
COMMON SHARES
OUTSTANDING 5,764 6,008 5,797 6,106
COMMON SHARES ASSUMING
DILUTION 5,867 6,081 5,880 6,178
INTEL CORPORATION
CONSOLIDATED SUMMARY BALANCE SHEET DATA
(In millions)
Dec. 30, Sept. 30, Dec. 31,
2006 2006 2005
------------ ------------ ------------
CURRENT ASSETS
Cash and short-term investments $8,868 $7,123 $11,314
Trading assets 1,134 1,096 1,458
Accounts receivable 2,709 3,358 3,914
Inventories:
Raw materials 608 535 409
Work in process 2,044 2,265 1,662
Finished goods 1,662 1,677 1,055
------------ ------------ ------------
4,314 4,477 3,126
Deferred taxes and other current
assets 1,255 1,550 1,382
------------ ------------ ------------
TOTAL CURRENT ASSETS 18,280 17,604 21,194
Property, plant and equipment,
net 17,602 18,038 17,111
Marketable strategic equity
securities 398 388 537
Other long-term investments 4,023 3,085 4,135
Goodwill 3,861 3,861 3,873
Other long-term assets 4,204 3,879 1,464
------------ ------------ ------------
TOTAL ASSETS $48,368 $46,855 $48,314
============ ============ ============
CURRENT LIABILITIES
Short-term debt $180 $196 $313
Accounts payable and accrued
liabilities 5,938 6,880 6,329
Deferred income on shipments to
distributors 599 603 632
Income taxes payable 1,797 1,378 1,960
------------ ------------ ------------
TOTAL CURRENT LIABILITIES 8,514 9,057 9,234
Long-term debt 1,848 2,060 2,106
Deferred tax liabilities 265 375 703
Other long-term liabilities 989 346 89
Stockholders' equity 36,752 35,017 36,182
------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $48,368 $46,855 $48,314
============ ============ ============
INTEL CORPORATION
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In millions)
Q4 2006 Q3 2006 Q4 2005
----------- ----------- -----------
GEOGRAPHIC REVENUE:
Asia-Pacific $4,855 $4,314 $5,132
50% 49% 50%
Americas $2,003 $1,891 $1,836
21% 22% 18%
Europe $1,900 $1,611 $2,288
19% 18% 23%
Japan $936 $923 $945
10% 11% 9%
CASH INVESTMENTS:
Cash and short-term investments $8,868 $7,123 $11,314
Trading assets - fixed income (1) 684 677 1,095
----------- ----------- -----------
Total cash investments $9,552 $7,800 $12,409
STRATEGIC EQUITY INVESTMENTS
Marketable strategic equity
securities $398 $388 $537
Other strategic investments 2,794 2,593 598
----------- ----------- -----------
Total strategic equity investments $3,192 $2,981 $1,135
TRADING ASSETS:
Trading assets - equity securities
offsetting deferred compensation
(2) $450 $419 $363
Total trading assets - sum of 1+2 $1,134 $1,096 $1,458
SELECTED CASH FLOW INFORMATION:
Depreciation $1,166 $1,193 $1,050
Share-based compensation $334 $335 -
Amortization of intangibles and
other acquisition-related costs $61 $63 $58
Capital spending ($1,103) ($1,167) ($1,359)
Stock repurchase program ($150) ($500) ($3,137)
Proceeds from sales of shares to
employees, tax benefit & other $291 $281 $144
Dividends paid ($576) ($577) ($482)
Net cash received(used) for
divestitures/acquisitions $600 $152 ($88)
EARNINGS PER SHARE INFORMATION:
Average common shares outstanding 5,764 5,769 6,008
Dilutive effect of employee equity
incentive plans 52 12 64
Dilutive effect of convertible debt 51 51 9
----------- ----------- -----------
Common shares assuming dilution 5,867 5,832 6,081
STOCK BUYBACK:
Shares repurchased 7.2 26.6 118.0
Cumulative shares repurchased 2,831.5 2,824.3 2,604.9
Remaining dollars authorized for
buyback (in billions) $17.3 $17.4 N/A
OTHER INFORMATION:
Employees (in thousands) 94.1 99.9 99.9
INTEL CORPORATION
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
($ in millions)
Three Months Ended Twelve Months Ended
------------------- -------------------
OPERATING SEGMENT INFORMATION: Q4 2006 Q4 2005 Q4 2006 Q4 2005
---------------------------------------- --------- --------- ---------
Digital Enterprise Group
Microprocessor revenue 3,855 4,929 14,606 19,412
Chipset, motherboard and
other revenue 1,307 1,476 5,270 5,725
Net revenue 5,162 6,405 19,876 25,137
Operating income 1,105 2,448 4,267 9,020
---------------------------------------- --------- --------- ---------
Mobility Group
Microprocessor revenue 2,668 2,400 9,212 8,704
Chipset and other revenue 925 705 3,097 2,427
Net revenue 3,593 3,105 12,309 11,131
Operating income 1,630 1,548 4,993 5,334
---------------------------------------- --------- --------- ---------
Flash Memory Group
Net revenue 576 600 2,163 2,278
Operating loss (186) (12) (555) (154)
---------------------------------------- --------- --------- ---------
All Other
Net revenue 363 91 1,034 280
Operating loss (1,061) (675) (3,053) (2,110)
---------------------------------------- --------- --------- ---------
Total
Net revenue 9,694 10,201 35,382 38,826
Operating income 1,488 3,309 5,652 12,090
---------------------------------------- --------- --------- ---------
The company's operating segments currently include the Digital
Enterprise Group, the Mobility Group, the Flash Memory Group, the
Digital Home Group, the Digital Health Group, and the Channel
Platforms Group. The prior period amounts have been adjusted
retrospectively to reflect reorganizations.
The company reports the financial results of the following
operating segments:
-- Digital Enterprise Group - includes microprocessors and related
chipsets and motherboards designed for the desktop and enterprise
computing market segments; communications infrastructure
components such as network processors, communications boards, and
embedded processors; wired connectivity devices; and products for
network and server storage.
-- Mobility Group - includes microprocessors and related chipsets
designed for the notebook computing market segment; and wireless
connectivity products. The operating results associated with the
divested assets of the communications and application processor
business were included in the Mobility Group operating segment
through the date of the divestiture.
-- Flash Memory Group - includes NOR flash memory products designed
for cellular phones and embedded form factors; and NAND flash
memory products manufactured by IMFT that are designed for memory
cards and digital audio players.
The Flash Memory Group, Digital Home Group, Digital Health Group
and Channel Platforms Group operating segments do not meet the
quantitative thresholds for reportable segments as defined by SFAS
No. 131. However, the Flash Memory Group is reported separately,
as management believes that this information is useful to the
reader. The Digital Home Group, Digital Health Group and Channel
Platforms Group operating segments are included within the "all
other" category.
The company has sales and marketing, manufacturing, finance, and
administration groups. Expenses of these groups are generally
allocated to the operating segments and are included in the
operating results reported above. Revenue for the "all other"
category primarily relates to microprocessors and related chipsets
sold by the Digital Home Group. In addition to the operating
results for the Digital Home Group, Digital Health Group, and
Channel Platforms Group operating segments, the "all other"
category includes certain corporate-level operating expenses,
including a portion of profit-dependent bonus and other expenses
not allocated to the operating segments; results of operations of
seed businesses that support the company's initiatives;
acquisition-related costs, including amortization and any
impairment of acquisition-related intangibles and goodwill;
charges for purchased in-process research and development; share-
based compensation charges; restructuring charges; and asset
impairment charges.
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the company's earnings release contains non-GAAP financial measures that exclude the effects of share-based compensation and the requirements of SFAS No. 123R, "Share-based Payment" ("123R"). The non-GAAP financial measures used by management and disclosed by the company exclude the income statement effects of all forms of share-based compensation and the effects of 123R upon the number of diluted shares used in calculating non-GAAP earnings per share. 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 to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
For additional information regarding these non-GAAP financial measures, see the Form 8-K dated January 16, 2007 that Intel has filed with the Securities and Exchange Commission.
INTEL CORPORATION
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
(In millions, except per-share amounts and percentages)
Three Months Ended
-----------------------------------
Dec. 30, Sept. 30, Dec. 31,
2006 2006 2005
----------- ----------- -----------
GAAP SPENDING $2,860 $2,814 $2,968
Adjustment for share-based
compensation (240) (232) -
----------- ----------- -----------
SPENDING EXCLUDING SHARE-BASED
COMPENSATION(1) $2,620 $2,582 $2,968
GAAP OPERATING INCOME $1,488 $1,374 $3,309
Adjustment for share-based
compensation within:
Cost of sales 94 103 -
Research and development 119 107 -
Marketing, general and
administrative 121 125 -
----------- ----------- -----------
OPERATING INCOME EXCLUDING SHARE-
BASED COMPENSATION(1) $1,822 $1,709 $3,309
GAAP NET INCOME $1,501 $1,301 $2,453
Adjustment for share-based
compensation within:
Cost of sales 94 103 -
Research and development 119 107 -
Marketing, general and
administrative 121 125 -
Income taxes (98) (87) -
----------- ----------- -----------
NET INCOME EXCLUDING SHARE-BASED
COMPENSATION(1) $1,737 $1,549 $2,453
GAAP DILUTED EARNINGS PER SHARE $0.26 $0.22 $0.40
Adjustment for share-based
compensation 0.04 0.05 -
----------- ----------- -----------
DILUTED EARNINGS PER SHARE
EXCLUDING SHARE-BASED
COMPENSATION(1) $0.30 $0.27 $0.40
GAAP COMMON SHARES ASSUMING
DILUTION 5,867 5,832 6,081
Adjustment for share-based
compensation (6) 12 -
----------- ----------- -----------
COMMON SHARES ASSUMING DILUTION
EXCLUDING SHARE-BASED
COMPENSATION(1) 5,861 5,844 6,081
GAAP GROSS MARGIN PERCENTAGE 49.6% 49.1% 61.8%
Adjustment for share-based
compensation 1.0% 1.2% -
----------- ----------- -----------
GROSS MARGIN PERCENTAGE EXCLUDING
SHARE-BASED COMPENSATION(1) 50.6% 50.3% 61.8%
(1) See Item 2.02 in the Form 8-K dated January 16, 2007 that Intel
has filed with the Securities and Exchange Commission.
SUPPLEMENTAL SHARE-BASED COMPENSATION OUTLOOK
Q1 2007 Forecast 2007 Full Year Forecast
--------------------- -----------------------
Gross margin impact Approximately 1% Approximately 1%
Research and development Approximately $100M Approximately $350M
impact
Marketing, general and Approximately $100M Approximately $400M
administrative impact
Source: Intel Corporation
Released Jan 16, 2007 • 4:10 PM EST