Intel Reports Second-Quarter Revenue of $12.8 Billion, Net Income of $2.0 Billion

  Intel Reports Second-Quarter Revenue of $12.8 Billion, Net Income of $2.0
  Billion

  *4th Generation Intel® Core™ processor and Silvermont architecture unveiled
    to strong acceptance
  *New Intel® Atom™ processor and Intel LTE solution tapped for Samsung*
    GALAXY Tab-3 10.1-inch
  *New leadership team implemented one of the most significant management
    reorganizations in a decade

Business Wire

SANTA CLARA, Calif. -- July 17, 2013

Intel Corporation today reported second-quarter revenue of $12.8 billion,
operating income of $2.7 billion, net income of $2.0 billion and EPS of $0.39.
The company generated approximately $4.7 billion in cash from operations, paid
dividends of $1.1 billion, and used $550 million to repurchase 23 million
shares of stock.

“In the second quarter, we delivered on our quarterly outlook and made several
key product announcements,” said Intel CEO Brian Krzanich. “In my first two
months as CEO, I have listened to a wide variety of views about Intel and our
industry from customers, employees and my leadership team and I am more
confident than ever about our opportunity as a company.”

“Looking ahead, the market will continue buying a wide range of computing
products,” he added. “Intel Atom and Core processors and increased SOC
integration will be Intel's future. We will leave no computing opportunity
untapped. To embrace these opportunities, I've made it Intel's highest
priority to create the best products for the fast growing ultra-mobile market
segment.”

Q2 Key Financial Information and Business Unit Trends

  *PC Client Group revenue of $8.1 billion, up 1.4 percent sequentially and
    down 7.5 percent year-over-year.
  *Data Center Group revenue of $2.7 billion, up 6.1 percent sequentially and
    flat year-over-year.
  *Other Intel® Architecture Group revenue of $942 million, down 3.7 percent
    sequentially and down 15.0 percent year-over-year.
  *Gross margin of 58 percent, up 2 percentage points sequentially and down 5
    percentage points year-over-year.
  *R&D plus MG&A spending of $4.7 billion, in line with the company’s
    expectation of approximately $4.7 billion.
  *Tax rate of 26 percent.

Financial Comparison
Quarterly
                     Q2 2013          Q1 2013          vs. Q1 2013
Revenue               $12.8 billion    $12.6 billion    up 2%
Gross Margin          58.3%            56.2%            up 2.1 pts.
Operating Income      $2.7 billion     $2.5 billion     up 8%
Net Income            $2.00 billion    $2.05 billion    down 2%
Earnings Per Share    39 cents         40 cents         down 3%

Business Outlook

Intel’s Business Outlook does not include the potential impact of any business
combinations, asset acquisitions, divestitures or other investments that may
be completed after July17.

Q3 2013

  *Revenue: $13.5 billion, plus or minus $500 million.
  *Gross margin percentage: 61 percent, plus or minus a couple of percentage
    points.
  *R&D plus MG&A spending: approximately $4.8 billion.
  *Amortization of acquisition-related intangibles: approximately $70
    million.
  *Impact of equity investments and interest and other: approximately $400
    million net gain.
  *Depreciation: approximately $1.7 billion.

Full-Year 2013

  *Revenue: Approximately flat year-on-year, down from prior expectations of
    low single digit percentage increase.
  *Gross margin percentage: 59 percent, plus or minus a couple percentage
    points, down from prior expectations of 60 percent, plus or minus a few
    percentage points.
  *R&D plus MG&A spending: $18.7 billion, plus or minus $200 million, down
    $200 million from prior expectations.
  *Amortization of acquisition-related intangibles: approximately $300
    million, unchanged from prior expectations.
  *Depreciation: $6.8 billion, plus or minus $100 million, unchanged from
    prior expectations.
  *Tax Rate: approximately 26 percent for each of the remaining quarters of
    the year.
  *Full-year capital spending: $11.0 billion, plus or minus $500 million,
    down $1.0 billion from prior expectations.

For additional information regarding Intel’s results and Business Outlook,
please see the CFO commentary at: www.intc.com/results.cfm.

Status of Business Outlook

Intel’s Business Outlook is posted on intc.com and may be reiterated in public
or private meetings with investors and others. The Business Outlook will be
effective through the close of business September13 unless earlier updated;
except that the Business Outlook for amortization of acquisition-related
intangibles, impact of equity investments and interest and other, and tax
rate, will be effective only through the close of business on July24. Intel’s
Quiet Period will start from the close of business on September13 until
publication of the company’s third-quarter earnings release, scheduled for
October15, 2013. During the Quiet Period, all of the Business Outlook and
other forward-looking statements disclosed in the company’s news releases and
filings with the SEC should be considered as historical, speaking as of prior
to the Quiet Period only and not subject to an update by the company.

Risk Factors

The above statements and any others in this document that refer to plans and
expectations for the third quarter, the year and the future are
forward-looking statements that involve a number of risks and uncertainties.
Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,”
“seeks,” “estimates,” “may,” “will,” “should” and their variations identify
forward-looking statements.Statements that refer to or are based on
projections, uncertain events or assumptions also identify forward-looking
statements.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 following to be the important
factors that could cause actual results to differ materially from the
company’s expectations.

  *Demand could be different from Intel's expectations due to factors
    including changes in business and economic conditions; customer acceptance
    of Intel’s and competitors’ products; supply constraints and other
    disruptions affecting customers; changes in customer order patterns
    including order cancellations; and changes in the level of inventory at
    customers. Uncertainty in global economic and financial conditions poses a
    risk that consumers and businesses may defer purchases in response to
    negative financial events, which could negatively affect product demand
    and other related matters.
  *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 and product demand that is highly variable and difficult to
    forecast. Revenue and the gross margin percentage are affected by the
    timing of Intel product introductions and the demand for and market
    acceptance of Intel's products; actions taken by Intel's competitors,
    including product offerings and introductions, marketing programs and
    pricing pressures and Intel’s response to such actions; and Intel’s
    ability to respond quickly to technological developments and to
    incorporate new features into its products.
  *The gross margin percentage could vary significantly from expectations
    based on capacity utilization; variations in inventory valuation,
    including variations related to the timing of qualifying products for
    sale; changes in revenue levels; segment product mix; the timing and
    execution of the manufacturing ramp and associated costs; start-up costs;
    excess or obsolete inventory; changes in unit costs; defects or
    disruptions in the supply of materials or resources; product manufacturing
    quality/yields; and impairments of long-lived assets, including
    manufacturing, assembly/test and intangible assets.
  *The tax rate expectation is based on current tax law and current expected
    income. The tax rate may be affected by 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, including payment of interest and
    penalties; and the ability to realize deferred tax assets.
  *Gains or losses from equity securities and interest and other could vary
    from expectations depending on gains or losses on the sale, exchange,
    change in the fair value or impairments of debt and equity investments;
    interest rates; cash balances; and changes in fair value of derivative
    instruments.
  *Intel's results could be affected by adverse economic, social, political
    and physical/infrastructure conditions in countries where 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.
  *Expenses, particularly certain marketing and compensation expenses, as
    well as restructuring and asset impairment charges, vary depending on the
    level of demand for Intel's products and the level of revenue and profits.
  *Intel’s results could be affected by the timing of closing of acquisitions
    and divestitures.
  *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, disclosure and other issues, such as the
    litigation and regulatory matters described in Intel's SEC reports. An
    unfavorable ruling could include monetary damages or an injunction
    prohibiting Intel from manufacturing or selling one or more products,
    precluding particular business practices, impacting Intel’s ability to
    design its products, or requiring other remedies such as compulsory
    licensing of intellectual property.

A detailed discussion of these and other factors that could affect Intel’s
results is included in Intel’s SEC filings, including the company’s most
recent reports on Form 10-Q and Form 10-K.

Earnings Webcast

Intel will hold a public webcast at 2 p.m. PDT today on its Investor Relations
website at www.intc.com. A webcast replay and MP3 download will also be
available on the site.

Intel plans to report its earnings for the third quarter of 2013 on
October15, 2013. Immediately following the earnings report, the company plans
to publish a commentary by Stacy J. Smith, executive vice president and chief
financial officer, at www.intc.com/results.cfm. A public webcast of Intel’s
earnings conference call will follow at 2 p.m. PDT at www.intc.com.

Starting with the third-quarter earnings announcement on October15, 2013, the
company plans to post its quarterly earnings results on its Investor Relations
website, at www.intc.com/results.cfm, and no longer distribute quarterly
financial details through a news wire service.The company may choose to issue
other financial-related news through a news wire service in addition to its
Investor Relations website.

About Intel

Intel (NASDAQ: INTC) is a world leader in computing innovation. The company
designs and builds the essential technologies that serve as the foundation for
the world’s computing devices. Additional information about Intel is available
at newsroom.intel.com and blogs.intel.com.

Intel, the Intel logo, Atom and Core are trademarks of Intel Corporation in
the United States and other countries.

*Other names and brands may be claimed as the property of others.

                                                                 
INTEL CORPORATION
CONSOLIDATED SUMMARY STATEMENT OF INCOME DATA
(In millions, except per share amounts)
                                                                        
                                     Three Months Ended    Six Months Ended
                                     Jun 29,    Jun 30,    Jun 29,    Jun 30,
                                     2013       2012       2013       2012
NET REVENUE                          $ 12,811   $ 13,501   $ 25,391   $ 26,407
Cost of sales                         5,341     4,947     10,855    9,588
GROSS MARGIN                          7,470     8,554     14,536    16,819
                                                                        
Research and development               2,516      2,513      5,043      4,914
Marketing, general and                2,165     2,131     4,112     4,104
administrative
R&D AND MG&A                           4,681      4,644      9,155      9,018
Amortization of acquisition-related   70        78        143       159
intangibles
OPERATING EXPENSES                    4,751     4,722     9,298     9,177
OPERATING INCOME                       2,719      3,832      5,238      7,642
Gains (losses) on equity               11         47         (15)       28
investments, net
Interest and other, net               (37)      55        (87)      78
INCOME BEFORE TAXES                    2,693      3,934      5,136      7,748
Provision for taxes                   693       1,107     1,091     2,183
NET INCOME                           $ 2,000    $ 2,827    $ 4,045    $ 5,565
                                                                        
BASIC EARNINGS PER COMMON SHARE      $ 0.40     $ 0.56     $ 0.82     $ 1.11
DILUTED EARNINGS PER COMMON SHARE    $ 0.39     $ 0.54     $ 0.79     $ 1.07
                                                                        
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
                BASIC                  4,978      5,022      4,963      5,010
                DILUTED                5,106      5,199      5,093      5,196

INTEL CORPORATION
CONSOLIDATED SUMMARY BALANCE SHEET DATA
(In millions)
                                                               
                                               Jun 29,    March 30,   Dec 29,
                                               2013       2013        2012
CURRENT ASSETS
  Cash and cash equivalents                    $ 3,778    $  5,698    $ 8,478
  Short-term investments                         6,214       4,323      3,999
  Trading assets                                 7,358       7,052      5,685
  Accounts receivable, net                       3,474       3,536      3,833
  Inventories:
                Raw materials                    487         451        478
                Work in process                  2,220       2,129      2,219
                Finished goods                  1,835      1,778     2,037
                                                 4,542       4,358      4,734
  Deferred tax assets                            2,121       2,109      2,117
  Other current assets                          1,561      1,601     2,512
TOTAL CURRENT ASSETS                            29,048     28,677    31,358
                                                                        
Property, plant and equipment, net               29,345      28,418     27,983
Marketable equity securities                     5,361       4,698      4,424
Other long-term investments                      1,642       1,309      493
Goodwill                                         10,005      9,756      9,710
Identified intangible assets, net                5,620       5,807      6,235
Other long-term assets                          4,640      4,418     4,148
  TOTAL ASSETS                                 $ 85,661   $  83,083   $ 84,351
                                                                        
CURRENT LIABILITIES
  Short-term debt                              $ 263      $  88       $ 312
  Accounts payable                               2,864       2,654      3,023
  Accrued compensation and benefits              1,981       1,501      2,972
  Accrued advertising                            1,060       987        1,015
  Deferred income                                1,971       1,901      1,932
  Other accrued liabilities                     3,250      4,667     3,644
TOTAL CURRENT LIABILITIES                       11,389     11,798    12,898
                                                                        
Long-term debt                                   13,150      13,143     13,136
Long-term deferred tax liabilities               3,709       3,427      3,412
Other long-term liabilities                      3,573       3,521      3,702
Stockholders' equity:
  Preferred stock                                —           —          —
  Common stock and capital in excess of          20,678      20,098     19,464
  par value
  Accumulated other comprehensive income         145         (410)      (399)
  (loss)
  Retained earnings                             33,017     31,506    32,138
TOTAL STOCKHOLDERS' EQUITY                      53,840     51,194    51,203
  TOTAL LIABILITIES AND STOCKHOLDERS'          $ 85,661   $  83,083   $ 84,351
  EQUITY

INTEL CORPORATION
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In millions)
                                                               
                                            Q2 2013      Q1 2013      Q2 2012
CASH INVESTMENTS:
Cash and short-term investments             $9,992       $10,021      $9,204
Trading assets - marketable debt            7,358        7,052        4,444
securities
Total cash investments                      $17,350      $17,073      $13,648
                                                                      
CURRENT DEFERRED INCOME:
Deferred income on shipments of             $770         $705         $765
components to distributors
Deferred income from software and           1,201        1,196        1,150
services group
Total current deferred income               $1,971       $1,901       $1,915
                                                                      
SELECTED CASH FLOW INFORMATION:
Depreciation                                $1,712       $1,682       $1,572
Share-based compensation                    $292         $295         $280
Amortization of intangibles                 $279         $382         $267
Capital spending                            ($2,723)     ($2,174)     ($2,662)
Net cash (used)/received for                ($286)       ($98)        ($282)
acquisitions/divestitures
Investments in non-marketable equity        ($90)        ($35)        ($79)
instruments
Stock repurchase program                    ($550)       ($533)       ($1,100)
Proceeds from sales of shares to            $612         $466         $552
employees & excess tax benefit
Dividends paid                              ($1,123)     ($1,114)     ($1,057)
                                                                      
EARNINGS PER COMMON SHARE INFORMATION:
Weighted average common shares              4,978        4,948        5,022
outstanding - basic
Dilutive effect of employee equity          67           78           108
incentive plans
Dilutive effect of convertible debt         61           54           69
Weighted average common shares              5,106        5,080        5,199
outstanding - diluted
                                                                      
STOCK BUYBACK:
Shares repurchased                          23           25           41
Cumulative shares repurchased (in           4.3          4.3          4.2
billions)
Remaining dollars authorized for buyback    $4.2         $4.8         $7.5
(in billions)
                                                                      
OTHER INFORMATION:
Employees (in thousands)                    106.0        105.4        102.8

INTEL CORPORATION
SUPPLEMENTAL OPERATING GROUP RESULTS
(In millions)
                                    
                               Three Months Ended        Six Months Ended
                               Jun 29,       Jun 30,     Jun 29,      Jun 30,
                              2013         2012        2013        2012
Net Revenue
     PC Client Group        $  8,100      $  8,754    $  16,092    $  17,253
     Data Center Group         2,743         2,734       5,328        5,139
     Other Intel               942           1,108       1,920        2,183
     Architecture Group
     Software and              610           586         1,198        1,157
     Services Group
     All other                416          319        853         675
     TOTAL NET REVENUE      $  12,811     $  13,501   $  25,391    $  26,407
                                                                      
                                                                      
Operating income (loss)
     PC Client Group        $  2,659      $  3,440    $  5,172     $  6,931
     Data Center Group         1,230         1,365       2,309        2,500
     Other Intel               (608)         (335)       (1,219)      (647)
     Architecture Group
     Software and              (8)           14          (32)         21
     Services Group
     All other                (554)        (652)      (992)       (1,163)
     TOTAL OPERATING        $  2,719      $  3,832    $  5,238     $  7,642
     INCOME
                                                                      
                                                                      
In the first quarter of 2013, we completed a reorganization that transferred a
portion of our wired connectivity business formerly included within the Data
Center Group to the PC Client Group, as the technology from that portion of
the business is primarily used for client connectivity. Prior period amounts
have been adjusted retrospectively to reflect this new organization structure.



Our operating groups shown above are comprised of the following:
                                                                      
• PC Client Group: Delivering platforms designed for the notebook (including
Ultrabook^TM systems and convertible) and desktop (including high-end
enthusiast PCs) market segments; wireless and wired connectivity products.
• Data Center Group: Delivering platforms designed for the server,
workstation, and storage computing market segments; and wired network
connectivity products.
• Other Intel Architecture Group consist of the following:
• Intelligent Systems Group: Delivering platforms designed for
embedded applications.
• Intel Mobile Communications: Delivering mobile phone components such as
baseband processors, radio frequency transceivers, and power management chips.
• Tablet Group: Delivering platforms designed for the tablet
market segment.
• Phone Group: Delivering platforms designed for the smartphone
market segment.
• Service Provider Group: Delivering gateway and
set-top box components.
• Netbook Group: Delivering platforms designed for the netbook
market segment.
• Software and Services Group consists of the following:
• McAfee: A wholly owned subsidiary delivering software products for endpoint
security, network and content security, risk and compliance, and consumer and
mobile security.
• Wind River Software Group: A wholly owned subsidiary delivering software
optimized products for the embedded and mobile market segments.
• Software and Services Group: Delivering software products and services that
promote Intel Architecture as the platform of choice for software development.
All Other consists of
the following:
• Non-Volatile Memory Solutions Group: Delivering NAND flash memory products
for use in a variety of devices.
• Corporate: Revenue, expenses, and charges such as:
• Acquisition-related costs, including amortization and any impairment of
acquisition-related intangibles and goodwill.
• Divested businesses for which discrete operating results are not reviewed by
our CODM.
• Results of operations of start-up businesses that support our initiatives,
including our foundry business.
• Acquisition-related costs, including amortization and any impairment of
acquisition-related intangibles and goodwill.


INTEL CORPORATION
SUPPLEMENTAL PLATFORM REVENUE INFORMATION
                   
                         Q2 2013            Q2 2013            YTD 2013
                         compared to Q1     compared to Q2     compared to YTD
                         2013               2012               2012
PC Client Platform
  Unit Volumes           5%                 (5%)               (6%)
  Average Selling        (3%)               -%                 1%
  Prices
                                                               
Data Center
Platform
  Unit Volumes           6%                 1%                 3%
  Average Selling        (1%)               (1%)               -%
  Prices
                                                               
  PC Client Group Notebook and Desktop Platform Key
  Drivers
- Notebook platform volumes decreased 7% from Q2 2012 to Q2 2013
- Notebook platform average selling prices decreased 4% from Q2 2012 to Q2
  2013
- Desktop platform volumes decreased 3% from Q2 2012 to Q2 2013
- Desktop platform average selling prices increased 6% from Q2 2012 to Q2 2013
                                                               
- Notebook platform volumes decreased 7% from the first six months of 2012 to
  the first six months of 2013
- Notebook platform average selling prices decreased 3% from the first six
  months of 2012 to the first six months of 2013
- Desktop platform volumes decreased 5% from the first six months of 2012 to
  the first six months of 2013
- Desktop platform average selling prices increased 6% from the first six
  months of 2012 to the first six months of 2013

Contact:

Intel Corporation
Investor Relations:
Reuben Gallegos, 408-765-5374
reuben.m.gallegos@intel.com
or
Media Relations:
Chris Kraeuter, 408-653-5358
chris.kraeuter@intel.com
 
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