Intel Reports Record Year and Record Fourth Quarter

Intel Corporation today reported full-year revenue of $43.6 billion, operating income of $15.9 billion, net income of $11.7 billion, and EPS of $2.05 - all records. The company generated approximately $16.7 billion in cash from operations, paid cash dividends of $3.5 billion, and used $1.5 billion to repurchase 70 million shares of common stock.

For the fourth-quarter, Intel posted revenue of $11.5 billion. The company reported fourth-quarter operating income of $4.3 billion, net income of $3.4 billion, and EPS of 59 cents. Fourth-quarter revenue, operating income, net income, and EPS were also all records. "2010 was the best year in Intel's history. We believe that 2011 will be even better," said Paul Otellini, Intel president and CEO.

Full-Year 2010 Key Financial Information

• PC Client Group revenue up 21 percent, Data Center Group revenue up 35 percent, other Intel architecture group revenue up 27 percent, and Intel® Atom™ microprocessor and chipset revenue of $1.6 billion up 8 percent.

• Gross margin of 66 percent, up 10 percentage points compared to 2009.

• Full-year capital spending was $5.2 billion, consistent with the company's expectation.

• The company used $1.5 billion to repurchase 70 million shares of common stock.

Q4 2010 Key Financial Information

• PC Client Group revenue flat, Data Center Group revenue up 15 percent, other Intel architecture group flat, and Intel Atom microprocessor and chipset revenue of $391 million flat, all sequentially.

• The average selling price (ASP) for microprocessors was slightly up sequentially.

• Gross margin was 67.5 percent, slightly above the company's expectation.

• R&D plus MG&A spending of $3.4 billion was higher than the company's expectation.

• The net gain of $140 million from equity investments and interest and other was better than the company's expectation.

• The effective tax rate was 24 percent, lower than the company's expectation of 31 percent primarily due to the retroactive reinstatement of the U.S. R&D tax credit.

Business Outlook

Intel's Business Outlook does not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after Jan. 13.

Q1 2011

• Revenue: $11.5 billion, plus or minus $400 million.

• Gross margin percentage: 64 percent, plus or minus a couple percentage points.

• R&D plus MG&A spending: approximately $3.4 billion.

• Impact of equity investments and interest and other: gain of approximately $200 million.

• Depreciation: approximately $1.2 billion.

Full-Year 2011

• Gross margin percentage: 65 percent, plus or minus a few percentage points.

• Spending (R&D plus MG&A): $13.9 billion, plus or minus $200 million.

• R&D spending: approximately $7.3 billion.

• Tax rate: approximately 29 percent.

• Depreciation: approximately $5 billion, plus or minus $100 million.

• Capital spending: expected to be $9.0 billion, plus or minus $300 million.

For additional information regarding Intel's results and Outlook, please see the CFO commentary intc.com/results.cfm]here.

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 4 until publication of the company's first-quarter earnings release, Intel will observe a "Quiet Period" during which the Business Outlook 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.

• Full-Year Results Revenue $43.6 billion, up $8.5 billion, 24 percent year-over-year

• Gross margin of 66 percent, up 10 percentage points year-over-year

• Operating income $15.9 billion, up $10.2 billion, 179 percent year-over-year

• Net income $11.7 billion, up $7.3 billion, 167 percent year-over-year

• EPS $2.05, up $1.28, 166 percent year-over-year

• Full-Year Results, Excluding the EC Fine and AMD Settlement Agreement On a non-GAAP basis, operating income $15.9 billion, up $7.5 Billion, 89 percent year-over-year

• On a non-GAAP basis, net income $11.7 billion, up $5.0 billion, 76 percent year-over-year

• On a non-GAAP basis, EPS $2.05, up 88 cents, 75 percent year-over-year

• Fourth-Quarter Results Revenue $11.5 billion, up $355 million, 3 percent sequentially

• Record gross margin of 67.5 percent, up 1.5 percentage points sequentially

• Operating income $4.3 billion, up $211 million, 5 percent sequentially

• Net income $3.4 billion, up $433 million, 15 percent sequentially

• EPS 59 cents, up 7 cents, 13 percent sequentially