Intel Second-Quarter Revenue $8.05 Billion; Earnings Per Share 27 Cents.SANTA CLARA Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. , Calif. -- Intel Corporation (company) Intel Corporation - A US microelectronics manufacturer. They produced the Intel 4004, Intel 8080, Intel 8086, Intel 80186, Intel 80286, Intel 80386, Intel 486 and Pentium microprocessor families as well as many other integrated circuits and personal computer networking today announced second-quarter revenue of $8.05 billion, approximately flat sequentially and up 18 percent year-over-year. Second-quarter net income was $1.8 billion, flat sequentially and up 96 percent year-over-year. Earnings per share were 27 cents, up 4 percent sequentially and up 93 percent from 14 cents in the second quarter of 2003. "Intel continued to post strong year-over-year results in the second quarter as our microprocessor microprocessor, integrated circuit containing the arithmetic, logic, and control circuitry required to interpret and execute instructions from a computer program. business followed seasonal trends and our communications business grew nicely, led by flash memory," said Intel CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Craig R. Barrett. "We had a notable quarter with respect to new product launches with the introduction of 90 nm processors for mobile and the enterprise market segment along with our Grantsdale chipset A group of chips designed to work as a unit to perform a function. For example, a modem chipset contains all the primary circuits for transmitting and receiving. A PC chipset provides the electronic interfaces between all subsystems (see PC chipset for illustration). for the desktop which delivers some of the most significant PC platform enhancements in a decade. Looking to the second half, we will use our investments in leading-edge capacity to drive growth in our core microprocessor business and expand our presence in chipsets, flash and other communications products." Intel's second-quarter results included a previously disclosed $62-million reversal of previously accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. taxes primarily related to the closing of a state income tax audit, as well as an adjustment to the effective tax rate. These items increased second-quarter earnings-per-share by 1.7 cents. Intel's first-quarter results included a legal settlement charge that reduced earnings per share by 1.7 cents. BUSINESS OUTLOOK The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Please see the Risk Factors Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this release for a description of certain risk factors that could cause actual results to differ, and refer to Intel's annual and quarterly reports on file with the Securities and Exchange Commission (SEC) for a more complete description of the risks. These statements do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after July 12. -- Revenue in the third quarter is expected to be between $8.6 billion and $9.2 billion. -- Gross margin percentage in the third quarter is expected to be approximately 60 percent, plus or minus a couple of points. Intel's gross margin percentage varies primarily with revenue levels, product mix and pricing, changes in unit costs and inventory valuation, capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. , and the timing of factory ramps and associated costs. -- The gross margin percentage for 2004 is now expected to be 60 percent, plus or minus a couple of points, as compared to the previous expectation of 62 percent, plus or minus a few points. The company expects faster growth in products such as flash memories, chipsets and motherboards that have lower margins. In addition, Intel expects microprocessor margins to increase at a rate slower than previously expected due to a slight reduction in microprocessor average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. and a slower than expected reduction in microprocessor unit costs. -- Expenses (R&D plus MG&A) in the third quarter are expected to be approximately $2.5 billion. Expenses, particularly certain marketing- and compensation-related expenses, vary depending on the level of revenue and profits. -- The R&D spending expectation for 2004 is unchanged at approximately $4.8 billion. -- The capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. expectation for 2004 is unchanged at between $3.6 billion and $4.0 billion. -- Gains from equity investments and interest and other in the third quarter are expected to be approximately $50 million. -- The tax rate for the third quarter is now expected to be approximately 31 percent, as compared to the previous expectation of approximately 32 percent, primarily due to an increase in the estimated tax Federal and state tax laws require a quarterly payment of estimated taxes due from corporations, trusts, estates, non-wage employees, and wage employees with income not subject to withholding. benefit for export sales. The tax rate expectation is based on current expected income and assumes Intel continues to receive tax benefits for export sales. The tax rate may be affected by changes in tax law, the closing of acquisitions or divestitures, the jurisdiction in which profits are determined to be earned and taxed, the resolution of issues arising from tax audits with various tax authorities, and the ability to realize deferred tax assets. -- Depreciation is expected to be between $1.1 billion and $1.2 billion in the third quarter and approximately $4.6 billion for the year. -- Amortization of acquisition-related intangibles and costs is expected to be approximately $40 million in the third quarter and approximately $175 million for the full year. SECOND-QUARTER REVIEW AND RECENT HIGHLIGHTS Financial Review -- The gross margin percentage for the second quarter was 59.4 percent, below the revised expectation of between 60 percent and 61 percent due to an unanticipated $38-million charge for a chipset manufacturing excursion excursion /ex·cur·sion/ (eks-kur´zhun) a range of movement regularly repeated in performance of a function, e.g., excursion of the jaws in mastication. that occurred late in the quarter and revenue being slightly below the midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. of the updated range. -- Gains from equity investments and interest and other in the quarter were $39 million, below the previous expectation of approximately $60 million, primarily due to higher than expected impairments. -- The effective tax rate for the quarter was 27.4 percent including the $62-million reversal of previously accrued taxes and an adjustment for an increase in the estimated tax benefit for export sales. -- Inventory levels grew by approximately $427 million during the quarter, with approximately half of the increase coming from microprocessor inventories, and the balance primarily from flash memory and chipset inventories. Key Product Trends (Sequential) -- Intel Architecture microprocessor units were lower. The average selling price was just below the first-quarter level. -- Chipset units were higher. -- Motherboard Also called the "system board," it is the main printed circuit board in an electronic device, which contains sockets that accept additional boards. In a desktop computer, the motherboard contains the CPU, chipset, PCI bus slots, AGP slot, memory sockets and controller circuits for the units set a record. -- Flash memory units were significantly higher. -- Connectivity product units set a record. Intel Architecture Business During the quarter, Intel introduced 22 microprocessors built on 90 nm lithography lithography (lĭthŏg`rəfē), type of planographic or surface printing. It is distinguished from letterpress (relief) printing and from intaglio printing (in which the design is cut or etched into the plate). and 300 mm wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. , as well as the first chipsets using the company's 130 nm technology. The introductions bring new microprocessor and platform technology to a wide range of desktop, notebook, workstation and server systems. For the desktop, Intel introduced a new family of chipsets designed to help make home PCs more entertaining and business PCs more productive and secure. Formerly code-named Grantsdale and Alderwood, the Intel(R) 915 G/P and 925X Express chipsets deliver some of the most significant PC platform enhancements in a decade, including support for high-definition video This article is about high-definition video technology. For television systems, see High-definition television. For the tape format, see HDV. For compression and prerecorded media, see High-definition pre-recorded media and compression. , 7.1 surround sound An audio recording and playback system that uses five or more channels plus a subwoofer channel. See 5.1 channel and 3D audio. audio and dual displays. Intel also introduced six Pentium(R) 4 processors with Hyper-Threading (HT) technology that can be used with the new chipsets to help users better enjoy digital music, photos, videos and games on the PC. The company also introduced four Celeron(R) D processors for value desktop systems. In mobile, the company launched new Intel(R) Pentium(R) M processors designed to boost the performance of wireless-enabled notebooks based on Intel(R) Centrino(TM) mobile technology. Formerly code-named Dothan, the processors include new design features such as increased on-die cache memory See cache. cache memory - cache that enhance the way wireless notebook users work, learn, play and communicate. The company also introduced several Mobile Intel(R) Pentium(R) 4 processors for desktop-equivalent notebooks and a Celeron(R) M processor for value notebooks. For the enterprise, Intel introduced new Intel(R) Xeon(R) processors, formerly code-named Nocona, which together with the Intel(R) E7525 chipset bring new capabilities and performance levels to workstations. The platforms support HT Technology, an 800 MHz (MegaHertZ) One million cycles per second. It is used to measure the transmission speed of electronic devices, including channels, buses and the computer's internal clock. A one-megahertz clock (1 MHz) means some number of bits (16, 32, 64, etc. system bus, PCI Express A high-speed peripheral interconnect from Intel introduced in 2002. Note that although sometimes abbreviated "PCX," PCI Express is not the same as "PCI-X" (see PCI-SIG and PCI-X for comparison). As a result of the confusion, "PCI-E" or "PCIe" is the accepted abbreviation. graphics and I/O (Input/Output) The transfer of data between the CPU and a peripheral device. Every transfer is an output from one device and an input to another. See PC input/output. I/O - Input/Output , DDR (Double Data Rate) Refers to an SDRAM memory chip that increases performance by doubling the effective data rate of the frontside bus. For more details, see SDRAM. DDR - Double Data Rate Random Access Memory 2 memory, 64-bit memory extension technology for working with data sets greater than 4 GB, and Demand Based Switching Intel Demand Based Switching (DBS) is a re-marketing of Intel's "SpeedStep" technology to the server marketplace. with enhanced Intel(R) SpeedStep(R) technology for lower power consumption. Server platforms based on the new Intel Xeon processors are expected to be introduced during the third quarter. The Itanium(R) 2 processor continued to gain acceptance in commercial IT deployments at companies including The Body Shop, Procter & Gamble and Volvo. Software availability for the Itanium processor grew with the commercial release of SAS (1) (SAS Institute Inc., Cary, NC, www.sas.com) A software company that specializes in data warehousing and decision support software based on the SAS System. Founded in 1976, SAS is one of the world's largest privately held software companies. See SAS System. (1) 9 business intelligence software optimized for Itanium 2-based servers. Intel showed the first wafers of a next-generation Itanium processor code-named Montecito that contains 1.7 billion transistors. Montecito is expected to deliver up to twice the performance of current Itanium processors and is scheduled to be the company's first dual-core processor when introduced in 2005. In high-performance computing High-speed computing, which typically refers to supercomputers used in scientific research. , the Top500(1) ranking for June reported that more than half of the world's 500 fastest supercomputers are based on Intel Xeon and Itanium 2 processors, up from just one Intel-based system A computer that uses a CPU from Intel, typically a Core or earlier Pentium chip. Also known as an "x86-based system." The x86 designation comes from the 8086 family of chips, which was used in the first PC and the ancestor of all that followed: 286, 386, 486, Pentium and Core. in the June 2001 ranking. The Itanium-based "Thunder" system at the Lawrence Livermore National Laboratory Lawrence Livermore National Laboratory: see Lawrence Berkeley National Laboratory. (body) Lawrence Livermore National Laboratory - (LLNL) A research organaisatin operated by the University of California under a contract with the US Department of Energy. was ranked second fastest in the world. Intel Communications Group In flash, the company increased shipments of its 1.8-volt Intel(R) StrataFlash(R) wireless memory optimized for cellular devices and expanded its product offerings into the "broad market" segment for flash in products such as set-top boxes The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. , communications equipment and many other embedded systems Embedded systems Computer systems that cannot be programmed by the user because they are preprogrammed for a specific task and are buried within the equipment they serve. . In communications infrastructure, Huawei Technologies and Korea Telecom KT (formerly, Korea Telecom, Korean: 한국통신, NYSE: KT) is South Korea's top integrated wired/wireless telecommunication service provider. KT has been Korea's leader in the development of the information & communications business for the last 25 years adopted Intel-based modular communications solutions in forthcoming products. The new equipment will use standards-based AdvancedTCA(1) system technology along with carrier grade Linux A specification that defines an industrial strength operating system environment using Linux. Carrier Grade Linux (CGL) covers hardware, availability, clustering, security, serviceability and performance. (1). Intel also introduced a 1U carrier grade server and announced new versions of its Pentium M A family of CPUs from Intel that are part of its Centrino brand for mobile computing. Introduced in 2003 at speeds up to 1.6 GHz, it was formerly code named "Banias." Introduced in 2004, the second-generation Pentium M (code named "Dothan") uses the same chip package but is built with 90 , Ultra Low Voltage Low voltage is an electrical engineering term that broadly identifies safety considerations of an electricity supply system based on the voltage used. While different definitions exist for the exact voltage range covered by "low voltage", the most commonly used ones include "mains Celeron M A mobile version of the Celeron CPU from Intel. Introduced in 2004, the Celeron M was added to the Centrino family. See Celeron and Centrino. , and Intel(R) PXA270 processors for use in communications infrastructure and other embedded applications An application that permanently resides in an industrial or consumer device. Providing some type of control function and/or user interface, the software is typically stored in a non-volatile memory such as ROM or flash memory. . In wireless networking See wireless network. , Intel and Proxim announced plans to develop WiMAX base stations and customer premise equipment for fixed and portable access. Intel announced agreements with the municipalities of Dalian and Chengdu to help bring WiMAX connectivity to Internet users Internet user n → internauta m/f Internet user Internet n → internaute m/f in these Chinese cities. In wireline networking, Intel introduced a server adapter A device that allows one system to connect to and work with another. An adapter is often a simple circuit that converts one set of signals to another; however, the term often refers to devices which are more accurately called "controllers. that provides the low cost, small form factor and multimode fiber An optical fiber with a larger core than singlemode fiber. It is the most commonly used fiber for short distances such as LANs. Light can enter the core at different angles, making it easier to connect the light source to broader light sources such as LEDs. capabilities needed to bring 10-gigabit Ethernet connectivity to the data center. In applications processing, customers including Dell Computer and palmOne introduced personal digital assistants based on the recently announced Intel(R) PXA27X processor family, formerly code-named Bulverde. Technology and Manufacturing Group Intel's transition to 90 nm, 300 mm silicon technology made continued progress during the quarter, with further yield increases and a crossover Crossover The point on a stock chart when a security and an indicator intersect. Crossovers are used by technical analysts to aid in forecasting the future movements in the price of a stock. In most technical analysis models, a crossover is a signal to either buy or sell. with 130 nm microprocessor fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. volumes. The company expects a crossover in total microprocessor shipments during the third quarter and anticipates that the vast majority of its microprocessor shipments will be converted to 90 nm technology by the end of the year. Intel also plans to begin production of the company's first 90 nm flash products on 200 mm technology during the third quarter. Intel announced the start of production at Fab 24 in Ireland, the company's third factory capable of producing 90 nm processors on 300 mm wafers. The company also announced plans to invest an additional $2 billion in its Irish facilities to expand clean room capacity and enable 65 nm manufacturing at Fab 24 along with a planned expansion called Fab 24-2. Intel announced that it has begun a $2 billion construction project to convert Fab 12, a 200 mm wafer fabrication Wafer Fabrication is a procedure composed of many repeated sequential processes to produce complete electrical or photonic circuits. Examples include production of radio frequency (RF) amplifiers, LEDs, optical computer components, and CPUs for computers. facility in Chandler Chandler, city (1990 pop. 90,533), Maricopa co., S central Ariz., in the Salt River valley; inc. 1920. It is both a residential community and a center for research and technology. Tourism is also important, and the San Marcos Golf Resort is in Chandler. , Ariz., to a 300 mm facility for initial use in 65 nm production. The project is scheduled to be completed in late 2005. EARNINGS WEBCAST Intel will hold a public webcast at 2:30 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT today on its Investor Relations Investor relations The process by which the corporation communicates with its investors. Web site at www.intc.com. A replay of the webcast will be available until Oct. 12. STATUS OF BUSINESS OUTLOOK AND MID-QUARTER BUSINESS UPDATE During the quarter, Intel's corporate representatives may reiterate re·it·er·ate tr.v. re·it·er·at·ed, re·it·er·at·ing, re·it·er·ates To say or do again or repeatedly. See Synonyms at repeat. re·it the Business Outlook during private meetings with investors, investment analysts, the media and others. Intel intends to publish a Mid-Quarter Business Update on Sept. 2. From the close of business on Aug. 27 until publication of the Update, Intel will observe a "Quiet Period" during which the Business Outlook disclosed in the company's press releases and filings with the SEC on Forms 10-K and 10-Q should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to update by the company. For more information about the Business Outlook, Update and related Quiet Periods, please refer to the Business Outlook section of Intel's Web site at www.intc.com. RISK FACTORS REGARDING FORWARD-LOOKING STATEMENTS The statements 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. A number of factors in addition to those discussed above could cause actual results to differ materially from expectations. Demand for Intel's products, which impacts revenue and the gross margin percentage, is affected by business and economic conditions, as well as computing computing - computer and communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. trends, and changes in customer order patterns. Revenue and the gross margin percentage are affected by competing chip architectures and manufacturing technologies, competing software-compatible microprocessors, pricing pressures and other competitive factors, as well as market acceptance of Intel's new products, the availability of sufficient inventory to meet demand, the availability of externally purchased components or materials, and the development and timing of introduction of compelling software applications and operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. that take advantage of the features of Intel's products. Future revenue is also dependent on continuing technological advancement, including developing and implementing new processes and strategic products, as well as the timing of new product introductions, sustaining and growing new businesses and integrating and operating any acquired businesses. The gross margin percentage could also be affected by the execution of the manufacturing ramp, including the ramp of 90 nm process technology on 300 mm wafers, excess manufacturing capacity, excess or obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. , variations in inventory valuation and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of manufacturing or assembly and test assets. Intel conducts much of its manufacturing, assembly and test, and sales activities outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and is thus subject to a number of other factors, including currency controls and fluctuations, tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic and import regulations, and regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. which may limit Intel's or its customers' ability to manufacture, assemble and test, design, develop or sell products in particular countries. If terrorist activity, armed conflict, civil or military unrest Unrest is a sociological phenomenon, for instance:
Contracts such as options and futures whose price is derived from the price of an underlying financial asset. . Expectations of impairment charges on investments are based on experience, and it is not possible to know which specific investments are likely to be impaired or the extent or timing of individual impairments. Results could also be affected by adverse effects associated with product defects and errata er·ra·ta n. Plural of erratum. (deviations from published specifications), and by litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or regulatory matters involving intellectual property, stockholder, consumer, antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. and other issues, such as the litigation and/or regulatory matters described in Intel's SEC reports, as well as other risk factors listed in Intel's SEC reports, including the report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 27. Intel, the world's largest chip maker, is also a leading manufacturer of computer, networking and communications products. Additional information about Intel is available at www.intel.com/pressroom. Intel, Pentium, Celeron, Intel Centrino, Intel Xeon, Intel SpeedStep, Itanium and Intel StrataFlash are marks 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 Six Months Ended
------------------- -------------------
June 26, June 28, June 26, June 28,
2004 2003 2004 2003
--------- --------- --------- ---------
NET REVENUE $ 8,049 $ 6,816 $ 16,140 $ 13,567
Cost of sales 3,269 3,348 6,490 6,587
--------- --------- --------- ---------
GROSS MARGIN 4,780 3,468 9,650 6,980
--------- --------- --------- ---------
Research and development 1,186 1,029 2,381 2,048
Marketing, general and
administrative 1,170 1,073 2,311 2,091
Impairment of goodwill - 6 - 6
Amortization of acquisition-
related intangibles and costs 43 84 101 168
--------- --------- --------- ---------
OPERATING EXPENSES 2,399 2,192 4,793 4,313
--------- --------- --------- ---------
OPERATING INCOME 2,381 1,276 4,857 2,667
Gains (losses) on equity
securities, net (8) (58) 11 (185)
Interest and other, net 47 53 96 105
--------- --------- --------- ---------
INCOME BEFORE TAXES 2,420 1,271 4,964 2,587
Income taxes 663 375 1,477 776
--------- --------- --------- ---------
NET INCOME $ 1,757 $ 896 $ 3,487 $ 1,811
========= ========= ========= =========
BASIC EARNINGS PER SHARE $ 0.27 $ 0.14 $ 0.54 $ 0.28
========= ========= ========= =========
DILUTED EARNINGS PER SHARE $ 0.27 $ 0.14 $ 0.53 $ 0.27
========= ========= ========= =========
COMMON SHARES OUTSTANDING 6,449 6,525 6,464 6,540
COMMON SHARES ASSUMING DILUTION 6,558 6,580 6,591 6,595
INTEL CORPORATION
CONSOLIDATED SUMMARY BALANCE SHEET DATA
(In millions)
June 26, March 27, Dec. 27,
2004 2004 2003
----------- ----------- -----------
CURRENT ASSETS
Cash and short-term investments $ 14,264 $ 13,146 $ 13,539
Trading assets 2,708 2,572 2,625
Accounts receivable 3,183 3,374 2,960
Inventories:
Raw materials 395 355 333
Work in process 1,912 1,682 1,490
Finished goods 916 759 696
----------- ----------- -----------
3,223 2,796 2,519
Deferred tax assets and other 1,380 1,203 1,239
----------- ----------- -----------
Total current assets 24,758 23,091 22,882
Property, plant and equipment,
net 16,007 16,192 16,661
Marketable strategic equity
securities 582 608 514
Other long-term investments 2,238 2,043 1,866
Goodwill 3,730 3,705 3,705
Other assets 1,357 1,449 1,515
----------- ----------- -----------
TOTAL ASSETS $ 48,672 $ 47,088 $ 47,143
=========== =========== ===========
CURRENT LIABILITIES
Short-term debt $ 216 $ 296 $ 224
Accounts payable and accrued
liabilities 5,253 4,928 5,237
Deferred income on shipments to
distributors 640 701 633
Income taxes payable 1,429 491 785
----------- ----------- -----------
Total current liabilities 7,538 6,416 6,879
LONG-TERM DEBT 898 927 936
DEFERRED TAX LIABILITIES 1,643 1,635 1,482
STOCKHOLDERS' EQUITY 38,593 38,110 37,846
----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 48,672 $ 47,088 $ 47,143
=========== =========== ===========
INTEL CORPORATION
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In millions)
Q2 2004 Q1 2004 Q2 2003
--------- --------- ----------
GEOGRAPHIC REVENUE:
Americas $1,956 $2,163 $1,955
24% 27% 28%
Asia-Pacific $3,661 $3,284 $2,778
45% 40% 41%
Europe $1,665 $1,927 $1,418
21% 24% 21%
Japan $767 $717 $665
10% 9% 10%
ADDITIONAL REVENUE-RELATED INFORMATION:
Intel Architecture business
microprocessor revenue $5,751 $5,980 $4,844
Intel Architecture business chipset,
motherboard and other revenue $1,023 $1,045 $1,006
Flash revenue $587 $417 $411
CASH INVESTMENTS:
Cash and short-term investments $14,264 $13,146 $11,202
Trading assets - fixed income (1) $2,390 $2,265 $2,162
------------------------------
Total cash investments $16,654 $15,411 $13,364
INTEL CAPITAL PORTFOLIO:
Marketable strategic equity securities $582 $608 $63
Other strategic investments $640 $680 $735
------------------------------
Total Intel Capital portfolio $1,222 $1,288 $798
TRADING ASSETS:
Trading assets - equity securities
offsetting deferred compensation (2) $318 $307 $272
Total trading assets - sum of 1+2 $2,708 $2,572 $2,434
SELECTED CASH FLOW INFORMATION:
Depreciation $1,151 $1,140 $1,162
Impairment of goodwill $0 $0 $6
Amortization of acquisition-related
intangibles & costs $43 $58 $84
Capital spending ($1,026) ($680) ($923)
Stock repurchase program ($1,511) ($1,505) ($1,006)
Proceeds from sales of shares to
employees, tax benefit & other $258 $490 $166
Dividends paid ($258) ($259) ($131)
Net cash used for acquisitions ($33) $0 $0
SHARE INFORMATION:
Average common shares outstanding 6,449 6,480 6,525
Dilutive effect of stock options 109 144 55
Common shares assuming dilution 6,558 6,624 6,580
STOCK BUYBACK:
Shares repurchased 56.0 49.2 51.8
Shares authorized for buyback 2,300.0 2,300.0 2,300.0
Cumulative shares repurchased (1,991.2) (1,935.2) (1,824.6)
Shares available for buyback 308.8 364.8 475.4
OTHER INFORMATION:
Employees (in thousands) 81.7 80.5 78.7
Days sales outstanding 36 36 36
INTEL CORPORATION
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
($ in millions)
Q2 2004 Q1 2004 YTD 2004 Q2 2003 YTD 2003
----------------------------------------------------------------------
OPERATING SEGMENT
INFORMATION:
Intel Architecture Business
Revenue 6,774 7,025 13,799 5,850 11,622
Operating income 2,788 3,008 5,796 1,829 3,734
----------------------------------------------------------------------
Intel Communications Group
Revenue 1,271 1,065 2,336 957 1,920
Operating loss (126) (219) (345) (255) (473)
----------------------------------------------------------------------
All Other
Revenue 4 1 5 9 25
Operating loss (281) (313) (594) (298) (594)
----------------------------------------------------------------------
Total
Revenue 8,049 8,091 16,140 6,816 13,567
Operating income 2,381 2,476 4,857 1,276 2,667
----------------------------------------------------------------------
Beginning in 2004, the company combined its communications-related
businesses into a single organization, the Intel Communications Group
(ICG). Previously, these communications businesses were in two
separate product line operating segments: the former Intel
Communications Group and the Wireless Communications and Computing
Group. The company now consists of two reportable product-line
operating segments: the Intel Architecture business, which is
composed of the Desktop Platforms Group, the Mobile Platforms Group
and the Enterprise Platforms Group; and ICG. All prior period amounts
have been restated to reflect the new presentation as well as certain
minor reorganizations effected through the second quarter of 2004.
The Intel Architecture operating segment's products include
microprocessors and related chipsets and motherboards. ICG's products
include flash memory; wired Ethernet and wireless connectivity
products; communications infrastructure components such as network
and embedded processors and optical components; microcontrollers;
application and cellular processors used in cellular handsets and
handheld computing devices; and cellular baseband chipsets.
The "all other" category includes acquisition-related costs, including
amortization and any impairments of acquisition-related intangibles
and goodwill. "All other" also includes the results of operations of
seed businesses that support the company's initiatives. Finally, "all
other" includes certain corporate-level operating expenses, including
a portion of profit-dependent bonus and other expenses not allocated
to the operating segments.
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