Intel Reports Third-Quarter 2021 Financial Results

News Sum­ma­ry

▪       Third-quar­ter GAAP reve­nue of $19.2 bil­li­on, up 5% year over year (YoY), and non-GAAP reve­nue of $18.1 bil­li­on, up 5% YoY.  Achie­ved all-time record reve­nue in Intel’s Inter­net of Things Group (IOTG) and record third-quar­ter reve­nue in the Data Cen­ter Group (DCG) and Mobi­leye businesses. 

▪       Third-quar­ter GAAP ear­nings-per-share (EPS) was $1.67; non-GAAP EPS was $1.71, which excee­ded July gui­d­ance by $0.61. Excee­ded July gui­d­ance for EPS and gross margin.

▪      Rai­sing full-year 2021 EPS and gross mar­gin gui­d­ance. Now expec­ting GAAP EPS of $4.50 and non-GAAP EPS of $5.28 and GAAP gross mar­gin of 55% and non-GAAP gross mar­gin of 57%1.

▪       Intel CFO Geor­ge Davis announ­ced plans to reti­re in May 2022.

 

SANTA CLARA, Calif., Octo­ber 21, 2021 — Intel Cor­po­ra­ti­on today repor­ted third-quar­ter 2021 finan­cial results.

Q3 sho­ne an even grea­ter spot­light on the glo­bal demand for semi­con­duc­tors, whe­re Intel has the uni­que bre­adth and sca­le to lead. Our focus on exe­cu­ti­on con­ti­nued as we star­ted deli­vering on our IDM 2.0 com­mit­ments. We bro­ke ground on new fabs, shared our acce­le­ra­ted path to regain pro­cess per­for­mance lea­ders­hip, and unvei­led our most dra­ma­tic archi­tec­tu­ral inno­va­tions in a deca­de. We also announ­ced major cus­to­mer wins across every part of our busi­ness,” said Pat Gel­sin­ger, Intel CEO. “We are still in the ear­ly sta­ges of our jour­ney, but I see the enor­mous oppor­tu­ni­ty ahead, and I couldn’t be prou­der of the pro­gress we are making towards that opportunity.”

Q3 2021 Finan­cial Highlights

  GAAP   Non-GAAP
  Q3 2021 Q3 2020 vs. Q3 2020   Q3 2021 Q3 2020 vs. Q3 2020
Reve­nue ($B) $19.2 $18.3 up 5%   $18.1 $17.3 up 5%
Gross Mar­gin 56.0% 53.1% up 2.9 ppt   57.8% 56.5% up 1.3 ppt
R&D and MG&A ($B) $5.5 $4.7 up 16%   $5.3 $4.5 up 17%
Ope­ra­ting Margin 27.2% 27.6% down 0.4 ppt   28.8% 30.4% down 1.7 ppt
Tax Rate 0.5% 15.2% down 14.7 ppt   0.4% 15.4% down 15 ppt
Net Inco­me ($B) $6.8 $4.3 up 60%   $7.0 $4.5 up 54%
Ear­nings Per Share $1.67 $1.02 up 64%   $1.71 $1.08 up 59%

In the third quar­ter, the com­pa­ny gene­ra­ted $9.9 bil­li­on in cash from ope­ra­ti­ons and paid divi­dends of $1.4 billion.

Intel CFO Geor­ge Davis announ­ced plans to reti­re from Intel in May 2022. He will con­ti­nue to ser­ve in his cur­rent role while Intel con­ducts a search for a new CFO and until his suc­ces­sor is appointed.

 

Busi­ness Unit Summary

Key Busi­ness Unit Reve­nue and Trends   Q3 2021   vs. Q3 2020
CCG   $9.7 bil­li­on   down 2%
DCG   $6.5 bil­li­on   up 10%
Inter­net of Things          
IOTG   $1.0 bil­li­on   up 54%
Mobi­leye   $326 mil­li­on   up 39%
NSG   $1.1 bil­li­on   down 4%
PSG   $478 mil­li­on   up 16%
           

Third-quar­ter reve­nue was led by strong reco­very in the Enter­pri­se por­ti­on of DCG and in IOTG, which saw hig­her demand amid reco­very from the eco­no­mic impacts of COVID-19.  The Cli­ent Com­pu­ting Group (CCG) was down due to lower note­book volu­mes due to indus­try-wide com­po­nent shor­ta­ges, and on lower adja­cent reve­nue, par­ti­al­ly off­set by hig­her average sel­ling pri­ces (ASPs) and strength in desktop.

Busi­ness Highlights

▪       Selec­ted by the U.S. government to pro­vi­de com­mer­cial found­ry ser­vices for the government’s RAMP‑C program. 

▪       Announ­ced Ama­zon as first cus­to­mer to use Intel Found­ry Ser­vices’ pack­a­ging ser­vices, and a part­ners­hip with Qual­comm to use the future Intel 20A pro­cess technology.

▪       Bro­ke ground on two new lea­ding-edge chip fac­to­ries at Intel’s Ocotil­lo cam­pus in Chand­ler, Ari­zo­na, three mon­ths ahead of schedule.

▪       Shared pro­cess and pack­a­ging road­map updates for deli­vering five nodes wit­hin four years, put­ting Intel on a path to res­to­re pro­cess per­for­mance per watt pari­ty in 2024 and lea­ders­hip in 2025 with key pro­cess inno­va­tions, inclu­ding Rib­bon­FET and Power­Via. Also intro­du­ced new advan­ced pack­a­ging tech­no­lo­gies, Fover­os Omni and Fover­os Direct, for 2023.

▪       Detail­ed Intel’s big­gest archi­tec­tu­ral shifts in a genera­ti­on with the first in-depth look at Alder Lake, our first per­for­mance hybrid archi­tec­tu­re with two new genera­ti­ons of x86 cores; Sap­phi­re Rapids, our new stan­dard-set­ting data cen­ter archi­tec­tu­re; our new dis­cre­te gaming gra­phics pro­ces­sing unit archi­tec­tu­re; new infra­st­ruc­tu­re pro­ces­sing units; and Pon­te Vec­chio, our tour-de-for­ce GPU archi­tec­tu­re with Intel’s hig­hest ever com­pu­te den­si­ty to acce­le­ra­te AI, HPC, and advan­ced ana­ly­tics workloads.

▪       Intro­du­ced the new Intel Arc brand for our upco­m­ing high-per­for­mance gra­phics pro­ducts, covering hard­ware and soft­ware, and services. 

▪       Intro­du­ced four new Intel Core pro­ces­sor-based Sur­face design wins with Micro­soft, inclu­ding the first Sur­face device to be Intel® Evo™ plat­form veri­fied, and two designs that bring Thun­der­bolt con­nec­ti­vi­ty to the Sur­face lineup.

▪       Announ­ced avai­la­bi­li­ty of the 3rd Gen Intel® Xeon® Scala­b­le pro­ces­sor (Ice Lake) for AWS cus­to­mers via the new Ama­zon Elastic Com­pu­te Cloud (Ama­zon EC2) M6i instan­ces and for Goog­le Cloud cus­to­mers via the new Com­pu­te Engi­ne N2

▪       Announ­ced U.S. Depart­ment of Ener­gy selec­ted next-genera­ti­on Intel Xeon Scala­b­le pro­ces­sors (Sap­phi­re Rapids) to power supercomputers.

▪       Announ­ced stra­te­gic glo­bal part­ners­hips with ZEEKR and Sixt SE and addi­tio­nal plans to unveil Mobileye’s robo­ta­xi equip­ped with the Mobi­leye Dri­ve™ system.

▪       Intro­du­ced second-genera­ti­on neu­ro­mor­phic rese­arch chip, Loihi 2, fab­ri­ca­ted with a pre-pro­duc­tion ver­si­on of the Intel 4 process. 

As part of its IDM 2.0 stra­te­gy, Intel will be making a seri­es of pro­duct and tech­no­lo­gy announ­ce­ments at its upco­m­ing Inno­va­ti­on vir­tu­al event on Octo­ber 27–28, 2021. The con­fe­rence is desi­gned for deve­lo­pers, indus­try insi­ders, and will fea­ture tech­ni­cal ses­si­ons on Intel’s AI, 5G, edge, cloud con­nec­ti­vi­ty, and cli­ent app­li­ca­ti­ons. Join the public web­cast and fol­low the news at newsroom.intel.com at 9 a.m. PDT on Wed­nes­day, Octo­ber 27th, 2021.

Addi­tio­nal infor­ma­ti­on regar­ding Intel’s results can be found in the Q3’21 Ear­nings Pre­sen­ta­ti­on avail­ab­le at:

www.intc.com.

 

Busi­ness Outlook

Intel’s gui­d­ance for the fourth quar­ter and full year inclu­des both GAAP and non-GAAP esti­ma­tes. Our non-GAAP mea­su­res exclu­de the NAND memo­ry busi­ness, which is sub­ject to a pre­vious­ly-announ­ced pen­ding sale, as well as cer­tain other items. Recon­ci­lia­ti­ons bet­ween GAAP and non-GAAP finan­cial mea­su­res are inclu­ded below.

Q4 2021   GAAP   Non-GAAP
    Appro­xi­mate­ly   Appro­xi­mate­ly
Reve­nue   $19.2 bil­li­on   $18.3 bil­li­on
Gross Mar­gin   51.4%   53.5%
Tax rate   37%   13%
Ear­nings per share   $0.78   $0.90

 

 

Full-Year 2021   GAAP   Non-GAAP
    Appro­xi­mate­ly   Appro­xi­mate­ly
Reve­nue   $77.7 bil­li­on   $73.5 bil­li­on
Gross Mar­gin   55%   57%
Tax rate   15%   9%
Ear­nings per share   $4.50   $5.28
Full-year capi­tal spending   $18.0–19.0 bil­li­on   $18.0–19.0 bil­li­on^
Free cash flow   N/A   $12.5 bil­li­on

Actu­al results may dif­fer mate­ri­al­ly from Intel’s Busi­ness Out­look as a result of, among other things, the fac­tors descri­bed under “For­ward-Loo­king State­ments” below.

Ear­nings Webcast

Intel will hold a public web­cast at 2 p.m. PDT today to dis­cuss the results for its third quar­ter of 2021. The live public web­cast can be acces­sed on Intel’s Inves­tor Rela­ti­ons web­site at www.intc.com. The Q3’21 Ear­nings Pre­sen­ta­ti­on, web­cast replay, and audio down­load will also be avail­ab­le on the site. 

Intel plans to report its ear­nings for the fourth quar­ter of 2021 on Janu­a­ry 26, 2022 prompt­ly after clo­se of mar­ket; rela­ted mate­ri­als will be avail­ab­le at www.intc.com. A public web­cast of Intel’s ear­nings con­fe­rence call will fol­low at 2 p.m. PDT at www.intc.com.

 

Inves­tor Meeting

Intel’s Inves­tor Mee­ting is now plan­ned for Febru­a­ry 17, 2022. On today’s ear­nings web­cast, Intel will pro­vi­de addi­tio­nal infor­ma­ti­on regar­ding its long-term out­look and plans.

 

For­ward-Loo­king Statements

Intel’s Busi­ness Out­look and other state­ments in this release that refer to future plans and expec­ta­ti­ons are for­ward-loo­king state­ments that invol­ve a num­ber of risks and uncer­tain­ties. Words such as “anti­ci­pa­tes,” “expects,” “intends,” “goals,” “plans,” “gui­d­ance,” “belie­ves,” “seeks,” “esti­ma­tes,” “con­ti­nues,” “com­mit­ted,” “on-track,” “may,” “will,” “would,” “should,” “could,” “acce­le­ra­te,” “ramp,” “deli­ver,” “path,” “road­map,” “pro­gress,” “fore­cast,” “likely,” “future,” “poten­ti­al,” “posi­tio­ned,” “incre­a­sing,” “oppor­tu­ni­ty,” “upco­m­ing” and varia­ti­ons of such words and simi­lar expres­si­ons are inten­ded to iden­ti­fy such for­ward-loo­king state­ments. State­ments that refer to or are based on esti­ma­tes, fore­casts, pro­jec­tions, uncer­tain events or assump­ti­ons, inclu­ding state­ments rela­ting to Intel’s stra­te­gy; manu­fac­tu­ring expan­si­on and invest­ment plans; plans and goals rela­ted to Intel’s found­ry busi­ness; sup­ply expec­ta­ti­ons, inclu­ding regar­ding indus­try shor­ta­ges and suf­fi­ci­en­cy of future sup­ply; pen­ding tran­sac­tions, inclu­ding the pen­ding sale of our NAND memo­ry busi­ness; total address­able mar­ket (TAM) and mar­ket oppor­tu­ni­ty; busi­ness plans and finan­cial expec­ta­ti­ons; future macroeco­no­mic con­di­ti­ons; future legis­la­ti­on; future impacts of the COVID-19 pan­de­mic; future pro­ducts, tech­no­lo­gy, and ser­vices, and the expec­ted avai­la­bi­li­ty and bene­fits of such pro­ducts, tech­no­lo­gy, and ser­vices, inclu­ding pro­duct ramps, manu­fac­tu­ring goals, plans, time­li­nes, and future pro­gress, future pro­cess nodes and tech­no­lo­gies inclu­ding Intel 20A, Rib­bon­FET, and Power­Via, pro­cess per­for­mance pari­ty and lea­ders­hip expec­ta­ti­ons, future pro­duct archi­tec­tures, Alder Lake, Sap­phi­re Rapids, and future GPU and IPU pro­ducts; expec­ta­ti­ons regar­ding cus­to­mers, inclu­ding with respect to designs, wins, orders, and part­ners­hips; pro­jec­tions regar­ding com­pe­ti­tors; and anti­ci­pa­ted trends in our busi­nes­ses or the mar­kets rele­vant to them, inclu­ding with respect to future demand and indus­try growth, also iden­ti­fy for­ward-loo­king state­ments. All for­ward-loo­king state­ments inclu­ded in this release are based on management’s expec­ta­ti­ons as of the date of this release and, except as requi­red by law, Intel dis­c­laims any obli­ga­ti­on to update the­se for­ward-loo­king state­ments to reflect future events or cir­cum­s­tan­ces. For­ward-loo­king state­ments invol­ve many risks and uncer­tain­ties that could cau­se actu­al results to dif­fer mate­ri­al­ly from tho­se expres­sed or implied in such state­ments. Intel pre­sent­ly con­si­ders the fol­lowing to be among the important fac­tors that can cau­se actu­al results to dif­fer mate­ri­al­ly from the company’s expectations.

▪       Demand for Intel’s pro­ducts is high­ly varia­ble and can dif­fer from expec­ta­ti­ons due to fac­tors inclu­ding chan­ges in busi­ness and eco­no­mic con­di­ti­ons; cus­to­mer con­fi­dence or inco­me levels, and the levels of cus­to­mer capi­tal spen­ding; the intro­duc­tion, avai­la­bi­li­ty, and mar­ket accep­t­ance of Intel’s pro­ducts, pro­ducts used tog­e­ther with Intel pro­ducts, and com­pe­ti­tors’ pro­ducts; com­pe­ti­ti­ve and pri­cing pres­su­res, inclu­ding actions taken by com­pe­ti­tors; sup­ply cons­traints and other dis­rup­ti­ons affec­ting cus­to­mers; chan­ges in cus­to­mer order pat­terns inclu­ding order can­cel­la­ti­ons; chan­ges in cus­to­mer needs and emer­ging tech­no­lo­gy trends; and chan­ges in the level of inven­to­ry and com­pu­ting capa­ci­ty at customers.

▪       Intel’s results can 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; excess or obso­le­te inven­to­ry; chan­ges in unit cos­ts; defects or dis­rup­ti­ons in the sup­ply of mate­ri­als or resour­ces, inclu­ding as a result of ongo­ing indus­try shor­ta­ges of com­pon­ents and sub­stra­tes; pro­duct manu­fac­tu­ring quality/yields; and chan­ges in capi­tal requi­re­ments and invest­ment plans. Varia­ti­ons in results can also be cau­sed by the timing of Intel pro­duct intro­duc­tions and rela­ted expen­ses, inclu­ding mar­ke­ting pro­grams, and Intel’s abi­li­ty to respond quick­ly to tech­no­lo­gi­cal deve­lo­p­ments and to intro­du­ce new pro­ducts or incor­po­ra­te new fea­tures into exis­ting pro­ducts, as well as decisi­ons to exit pro­duct lines or busi­nes­ses, which can result in rest­ruc­tu­ring and asset impairment charges.

▪       Intel’s results can be affec­ted by adver­se eco­no­mic, social, poli­ti­cal, regu­la­to­ry, and physical/infrastructure con­di­ti­ons in coun­tries whe­re Intel, its cus­to­mers or its sup­pliers ope­ra­te, inclu­ding reces­si­on or slowing growth, mili­ta­ry con­flict and other secu­ri­ty risks, natu­ral dis­as­ters, infra­st­ruc­tu­re dis­rup­ti­ons, health con­cerns (inclu­ding the COVID-19 pan­de­mic), fluc­tua­tions in cur­ren­cy exchan­ge rates, sanc­tions and tariffs, poli­ti­cal dis­pu­tes, chan­ges in government grants and incen­ti­ves, and con­ti­nuing uncer­tain­ty regar­ding social, poli­ti­cal, immi­gra­ti­on, and tax and tra­de poli­ci­es in the U.S. and abroad. Results can also be affec­ted by the for­mal or infor­mal impo­si­ti­on by coun­tries of new or revi­sed export and/or import and doing-busi­ness regu­la­ti­ons, inclu­ding chan­ges or uncer­tain­ty rela­ted to the U.S. government enti­ty list and chan­ges in the abi­li­ty to obtain export licen­ses, which can be chan­ged without pri­or notice.

▪       The COVID-19 pan­de­mic has pre­vious­ly adver­se­ly affec­ted signi­fi­cant por­ti­ons of Intel’s busi­ness and could have a mate­ri­al adver­se effect on Intel’s finan­cial con­di­ti­on and results of ope­ra­ti­ons. The pan­de­mic has resul­ted in aut­ho­ri­ties impo­sing nume­rous mea­su­res to try to con­tain the virus. The­se mea­su­res have impac­ted and may fur­ther impact our work­for­ce and ope­ra­ti­ons, the ope­ra­ti­ons of our cus­to­mers, and tho­se of our respec­ti­ve ven­dors, sup­pliers, and part­ners. Restric­tions on our manu­fac­tu­ring or sup­port ope­ra­ti­ons or work­for­ce, or simi­lar limi­ta­ti­ons for our ven­dors and sup­pliers, can impact our abi­li­ty to meet cus­to­mer demand and could have a mate­ri­al adver­se effect on us. Restric­tions or dis­rup­ti­ons of trans­por­ta­ti­on, or dis­rup­ti­ons in our cus­to­mers’ ope­ra­ti­ons and sup­ply chains, may adver­se­ly affect our results of ope­ra­ti­ons. The pan­de­mic has cau­sed us to modi­fy our busi­ness prac­ti­ces. The­re is no cer­tain­ty that such mea­su­res will be suf­fi­ci­ent to miti­ga­te the risks posed by the virus, and ill­ness and work­for­ce dis­rup­ti­ons could lead to unavai­la­bi­li­ty of our key per­son­nel and harm our abi­li­ty to per­form cri­ti­cal func­tions. The pan­de­mic has signi­fi­cant­ly incre­a­sed eco­no­mic and demand uncer­tain­ty. Demand for our pro­ducts could be mate­ri­al­ly har­med in the future. The pan­de­mic could lead to incre­a­sed dis­rup­ti­on and vola­ti­li­ty in capi­tal mar­kets and credit mar­kets, which could adver­se­ly affect our liqui­di­ty and capi­tal resour­ces. The degree to which COVID-19 impacts our results will depend on future deve­lo­p­ments, which are high­ly uncer­tain. The impact of the pan­de­mic can also exa­cer­ba­te other risks dis­cus­sed in this section.

▪       Intel ope­ra­tes in high­ly com­pe­ti­ti­ve indus­tries and its ope­ra­ti­ons have high cos­ts that are eit­her fixed or dif­fi­cult to redu­ce in the short term. In addi­ti­on, we have ent­e­red new are­as and intro­du­ced adja­cent pro­ducts, such as our inten­ti­on to beco­me a major pro­vi­der of found­ry ser­vices, and we face new sources of com­pe­ti­ti­on and uncer­tain mar­ket demand or accep­t­ance of our offe­rings with respect to the­se new are­as and pro­ducts, and they do not always grow as projected.

▪       Intel’s expec­ted tax rate is based on cur­rent tax law, inclu­ding cur­rent inter­pre­ta­ti­ons of the Tax Cuts and Jobs Act of 2017 (TCJA), and cur­rent expec­ted inco­me and can be affec­ted by chan­ges in inter­pre­ta­ti­ons of TCJA and other laws; chan­ges in the volu­me and mix of pro­fits ear­ned and loca­ti­on of assets across juris­dic­tions with vary­ing tax rates; 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.

▪       Intel’s results can be affec­ted by gains or los­ses from equi­ty secu­ri­ties and inte­rest and other, which can vary depen­ding on gains or los­ses on the chan­ge in fair value, sale, exchan­ge, or impairments of equi­ty and debt invest­ments, inte­rest rates, cash balan­ces, and chan­ges in fair value of deri­va­ti­ve instruments. 

▪       Pro­duct defects or erra­ta (devia­ti­ons from publis­hed spe­ci­fi­ca­ti­ons) can adver­se­ly impact our expen­ses, reve­nues, and reputation.

▪       We or third par­ties regu­lar­ly iden­ti­fy secu­ri­ty vul­nera­bi­li­ties with respect to our pro­ces­sors and other pro­ducts as well as the ope­ra­ting sys­tems and workloads run­ning on them. Secu­ri­ty vul­nera­bi­li­ties and any limi­ta­ti­ons of, or adver­se effects resul­ting from, miti­ga­ti­on tech­ni­ques can adver­se­ly affect our results of ope­ra­ti­ons, finan­cial con­di­ti­on, cus­to­mer rela­ti­ons­hips, pro­spects, and repu­ta­ti­on in a num­ber of ways, any of which may be mate­ri­al, inclu­ding incur­ring signi­fi­cant cos­ts rela­ted to deve­lo­ping and deploy­ing updates and miti­ga­ti­ons, wri­ting down inven­to­ry value, a reduc­tion in the com­pe­ti­ti­ve­ness of our pro­ducts, defen­ding against pro­duct claims and liti­ga­ti­on, respon­ding to regu­la­to­ry inqui­ries or actions, paying dama­ges, addres­sing cus­to­mer satis­fac­tion con­si­de­ra­ti­ons, or taking other reme­di­al steps with respect to third par­ties. Adver­se publi­ci­ty about secu­ri­ty vul­nera­bi­li­ties or miti­ga­ti­ons could dama­ge our repu­ta­ti­on with cus­to­mers or users and redu­ce demand for our pro­ducts and services.

▪       Cyber­se­cu­ri­ty inci­dents, whe­ther or not suc­cess­ful, can affect Intel’s results by causing us to incur signi­fi­cant cos­ts or dis­rup­t­ing our ope­ra­ti­ons or tho­se of our cus­to­mers and sup­pliers, and can result in repu­ta­tio­nal harm.

▪       Intel’s results can be affec­ted by liti­ga­ti­on or regu­la­to­ry mat­ters invol­ving intel­lec­tu­al pro­per­ty, stock­hol­der, con­su­mer, anti­trust, com­mer­cial, dis­clo­sure, and other issu­es, as well as by the impact and timing of sett­le­ments and dis­pu­te reso­lu­ti­ons. For examp­le, in the first quar­ter of 2021, Intel accrued a $2.2 bil­li­on char­ge rela­ted to liti­ga­ti­on invol­ving VLSI Tech­no­lo­gy LLC (VLSI). An unfa­vor­able ruling can inclu­de mone­ta­ry dama­ges or an injunc­tion pro­hi­bi­t­ing us from manu­fac­tu­ring or sel­ling one or more pro­ducts, pre­clu­ding par­ti­cu­lar busi­ness prac­ti­ces, impac­ting our abi­li­ty to design pro­ducts, or requi­ring other reme­di­es such as com­pul­so­ry licen­sing of intel­lec­tu­al property.

▪       Intel’s results can be affec­ted by the impact and timing of clo­sing of acqui­si­ti­ons, dive­s­ti­tures, and other signi­fi­cant tran­sac­tions. In addi­ti­on, the­se tran­sac­tions do not always achie­ve our finan­cial or stra­te­gic objec­ti­ves and can dis­rupt our ongo­ing busi­ness and adver­se­ly impact our results of ope­ra­ti­ons. We may not rea­li­ze the expec­ted bene­fits of port­fo­lio decisi­ons due to nume­rous risks, inclu­ding unfa­vor­able pri­ces and terms; chan­ges in mar­ket con­di­ti­ons; limi­ta­ti­ons due to regu­la­to­ry or govern­men­tal appro­vals, con­trac­tu­al terms, or other con­di­ti­ons; and poten­ti­al con­ti­nued finan­cial obli­ga­ti­ons asso­cia­ted with such tran­sac­tions. Risks and uncer­tain­ties rela­ting to the pen­ding sale of our NAND memo­ry busi­ness to SK hynix are descri­bed in our Form 10‑K filed with the SEC on Janu­a­ry 22, 2021.

▪       The amount, timing, and exe­cu­ti­on of Intel’s stock repurcha­se pro­gram fluc­tua­te based on Intel’s prio­ri­ties for the use of cash for other purposes—such as inves­ting in our busi­ness, inclu­ding ope­ra­tio­nal and capi­tal spen­ding, acqui­si­ti­ons, and retur­ning cash to our stock­hol­ders as divi­dend payments—and becau­se of chan­ges in cash flows, tax laws, and other laws, or the mar­ket pri­ce of our com­mon stock.

Detail­ed infor­ma­ti­on regar­ding the­se and other fac­tors that could affect Intel’s busi­ness and results is inclu­ded in Intel’s SEC filings, inclu­ding the company’s most recent reports on Forms 10‑K and 10‑Q, par­ti­cu­lar­ly the “Risk Fac­tors” sec­tions of tho­se reports. Copies of the­se filings may be obtai­ned by visi­t­ing our Inves­tor Rela­ti­ons web­site at www.intc.com or the SEC’s web­site at www.sec.gov.

 

About Intel

Intel (Nasdaq: INTC) is an indus­try lea­der, crea­ting world-chan­ging tech­no­lo­gy that enab­les glo­bal pro­gress and enri­ches lives. Inspi­red by Moore’s Law, we con­ti­nuous­ly work to advan­ce the design and manu­fac­tu­ring of semi­con­duc­tors to help address our cus­to­mers’ grea­test chal­len­ges. By embed­ding intel­li­gence in the cloud, net­work, edge and every kind of com­pu­ting device, we unleash the poten­ti­al of data to trans­form busi­ness and socie­ty for the bet­ter. To learn more about Intel’s inno­va­tions, go to newsroom.intel.com and intel.com.

© Intel Cor­po­ra­ti­on. Intel, the Intel logo, and other Intel marks are trade­marks of Intel Cor­po­ra­ti­on or its sub­si­dia­ries. Other names and brands may be clai­med as the pro­per­ty of others.

Con­ta­cts: Broo­ke Wells Ste­pha­nie Matthew
  Inves­tor Relations Media Rela­ti­ons
  503–613-8230 669–342-8736
  brooke.wells@intel.com stephanie.l.matthew@intel.com

 

Intel Cor­po­ra­ti­on

Con­so­li­da­ted Con­den­sed State­ments of Inco­me and Other Information

    Three Mon­ths Ended   Nine Mon­ths Ended
(In Mil­li­ons, Except Per Share Amounts; unaudited)   Sep 25, 2021   Sep 26, 2020   Sep 25, 2021   Sep 26, 2020
Net reve­nue   $ 19,192      $ 18,333      $ 58,496      $ 57,889   
Cost of sales   8,446      8,592      25,690      25,625   
Gross mar­gin   10,746      9,741      32,806      32,264   
Rese­arch and development   3,803      3,272      11,141      9,901   
Mar­ke­ting, gene­ral and administrative   1,674      1,435      4,601      4,423   
Rest­ruc­tu­ring and other charges   42      (25)     2,597      146   
Ope­ra­ting expenses   5,519      4,682      18,339      14,470   
Ope­ra­ting income   5,227      5,059      14,467      17,794   
Gains (los­ses) on equi­ty invest­ments, net   1,707      56      2,370      212   
Inte­rest and other, net   (76)     (74)     (328)     (416)  
Inco­me befo­re taxes   6,858      5,041      16,509      17,590   
Pro­vi­si­on for taxes   35      765      1,264      2,548   
Net inco­me   $ 6,823      $ 4,276      $ 15,245      $ 15,042   
                 
Ear­nings per share—basic   $ 1.68      $ 1.02      $ 3.76      $ 3.55   
Ear­nings per share—diluted   $ 1.67      $ 1.02      $ 3.73      $ 3.52   
                 
Weigh­ted average shares of com­mon stock outstanding:                
Basic   4,061      4,188      4,055      4,233   
Dilu­t­ed   4,086      4,211      4,089      4,269   

 

    Three Mon­ths Ended
(In Mil­li­ons)   Sep 25, 2021   Sep 26, 2020
Ear­nings per share of com­mon stock information:        
Weigh­ted average shares of com­mon stock outstanding—basic   4,061      4,188   
Dilu­ti­ve effect of employee equi­ty incen­ti­ve plans   25      23   
Weigh­ted average shares of com­mon stock outstanding—diluted   4,086      4,211   
         
Stock buy­back:        
Shares repurcha­sed   —      166   
Cumu­la­ti­ve shares repurcha­sed (in billions)   5.8      5.7   
Remai­ning dol­lars aut­ho­ri­zed for buy­back (in billions)   $ 7.2      $ 9.7   
         
Other infor­ma­ti­on:        
Employees (in thousands)   117.2      111.3   
                 

 

 

Intel Cor­po­ra­ti­on

Con­so­li­da­ted Con­den­sed Balan­ce Sheets

(In Mil­li­ons)   Sep 25, 2021   Dec 26, 2020
Assets   (unau­di­ted)    
Cur­rent assets:        
Cash and cash equivalents   $ 7,870      $ 5,865   
Short-term invest­ments   4,004      2,292   
Tra­ding assets   22,761      15,738   
Accounts receiva­ble   8,400      6,782   
Invent­ories        
Raw mate­ri­als   1,274      908   
Work in process   6,304      5,693   
Finis­hed goods   2,220      1,826   
    9,798      8,427   
Assets held for sale   6,398      5,400   
Other cur­rent assets   2,073      2,745   
Total cur­rent assets   61,304      47,249   
         
Pro­per­ty, plant and equip­ment, net   59,733      56,584   
Equi­ty investments   6,050      5,152   
Other long-term investments   953      2,192   
Good­will   26,786      26,971   
Iden­ti­fied intan­gi­ble assets, net   7,684      9,026   
Other long-term assets   5,452      5,917   
Total assets   $ 167,962      $ 153,091   
         
Lia­bi­li­ties        
Cur­rent liabilities        
Short-term debt   $ 4,694      $ 2,504   
Accounts paya­ble   6,792      5,581   
Accrued com­pen­sa­ti­on and benefits   4,026      3,999   
Other accrued liabilities   14,060      12,670   
Total cur­rent liabilities   29,572      24,754   
Debt   35,610      33,897   
Con­tract liabilities   62      1,367   
Inco­me taxes payable   4,223      4,578   
Defer­red inco­me taxes   3,019      3,843   
Other long-term liabilities   5,389      3,614   
Stock­hol­ders’ equity        
Com­mon stock and capi­tal in excess of par value, 4,067 issued and out­stan­ding (4,062 issued and out­stan­ding as of Decem­ber 26, 2020)   27,592      25,556   
Accu­mu­la­ted other com­pre­hen­si­ve inco­me (loss)   (1,147)     (751)  
Retai­ned earnings   63,642      56,233   
Total stock­hol­ders’ equity   90,087      81,038   
Total lia­bi­li­ties and stock­hol­ders’ equity   $ 167,962      $ 153,091   

 

 

Intel Cor­po­ra­ti­on

Con­so­li­da­ted Con­den­sed State­ments of Cash Flows

    Nine Mon­ths Ended
(In Mil­li­ons; unaudited)   Sep 25, 2021   Sep 26, 2020
         
Cash and cash equi­va­lents, begin­ning of period   $ 5,865      $ 4,194   
Cash flows pro­vi­ded by (used for) ope­ra­ting activities:        
Net inco­me   15,245      15,042   
Adjus­t­ments to recon­ci­le net inco­me to net cash pro­vi­ded by ope­ra­ting activities:        
Depre­cia­ti­on   7,357      7,925   
Share-based com­pen­sa­ti­on   1,587      1,393   
Rest­ruc­tu­ring and other charges   2,597      146   
Amor­tiz­a­ti­on of intangibles   1,361      1,311   
(Gains) los­ses on equi­ty invest­ments, net   (1,113)     (105)  
Chan­ges in assets and liabilities:        
Accounts receiva­ble   (1,618)     525   
Invent­ories   (1,212)     (570)  
Accounts paya­ble   1,095      355   
Accrued com­pen­sa­ti­on and benefits   (16)     (569)  
Pre­paid sup­ply agreements   (1,577)     (91)  
Inco­me taxes   (570)     493   
Other assets and liabilities   1,058      (361)  
Total adjus­t­ments   8,949      10,452   
Net cash pro­vi­ded by ope­ra­ting activities   24,194      25,494   
Cash flows pro­vi­ded by (used for) inves­ting activities:        
Addi­ti­ons to pro­per­ty, plant and equipment   (11,579)     (10,392)  
Addi­ti­ons to held for sale NAND pro­per­ty, plant and equipment   (1,118)     —   
Purcha­ses of avail­ab­le-for-sale debt investments   (3,983)     (6,323)  
Matu­ri­ties and sales of avail­ab­le-for-sale debt investments   3,457      5,037   
Purcha­ses of tra­ding assets   (26,343)     (14,744)  
Matu­ri­ties and sales of tra­ding assets   18,813      11,227   
Other inves­ting   620      83   
Net cash used for inves­ting activities   (20,133)     (15,112)  
Cash flows pro­vi­ded by (used for) finan­cing activities:        
Issu­an­ce of long-term debt, net of issu­an­ce costs   4,974      10,247   
Repay­ment of debt and debt conversion   (500)     (4,525)  
Pro­ceeds from sales of com­mon stock through employee equi­ty incen­ti­ve plans   1,016      897   
Repurcha­se of com­mon stock   (2,415)     (12,229)  
Acce­le­ra­ted share repurcha­se for­ward agreements   —      (2,000)  
Pay­ment of divi­dends to stockholders   (4,231)     (4,215)  
Other finan­cing   (900)     605   
Net cash pro­vi­ded by (used for) finan­cing activities   (2,056)     (11,220)  
Net incre­a­se (decre­a­se) in cash and cash equivalents   2,005      (838)  
Cash and cash equi­va­lents, end of period   $ 7,870      $ 3,356   

 

 

Intel Cor­po­ra­ti­on

Sup­ple­men­tal Ope­ra­ting Seg­ment Results

    Three Mon­ths Ended   Nine Mon­ths Ended
(In Mil­li­ons)   Sep 25, 2021   Sep 26, 2020   Sep 25, 2021   Sep 26, 2020
Net reve­nue                
Cli­ent Com­pu­ting Group                
Plat­form   $ 8,954      $ 8,762      $ 27,968      $ 25,703   
Adja­cent   710      1,085      2,410      3,415   
    9,664      9,847      30,378      29,118   
Data Cen­ter Group                
Plat­form   5,747      5,151      $ 16,261      $ 17,759   
Adja­cent   749      754      2,254      2,256   
    6,496      5,905      18,515      20,015   
Inter­net of Things                
IOTG   1,042      677      2,940      2,230   
Mobi­leye   326      234      1,030      634   
    1,368      911      3,970      2,864   
Non-Vola­ti­le Memo­ry Solu­ti­ons Group   1,105      1,153      3,310      4,150   
Pro­gramm­a­ble Solu­ti­ons Group   478      411      1,450      1,431   
All other   81      106      873      311   
Total net revenue   $ 19,192      $ 18,333      $ 58,496      $ 57,889   
                 
Ope­ra­ting inco­me (loss)                
Cli­ent Com­pu­ting Group   $ 3,317      $ 3,554      $ 11,197      $ 10,621   
Data Cen­ter Group   2,057      1,903      $ 5,271      $ 8,494   
Inter­net of Things                
IOTG   276      61      775      374   
Mobi­leye   105      47      361      131   
    381      108      1,136      505   
Non-Vola­ti­le Memo­ry Solu­ti­ons Group   442      29      1,015      285   
Pro­gramm­a­ble Solu­ti­ons Group   76      40      246      217   
All other   (1,046)     (575)     (4,398)     (2,328)  
Total ope­ra­ting income   $ 5,227      $ 5,059      $ 14,467      $ 17,794   

 

We deri­ve a sub­stan­ti­al majo­ri­ty of our reve­nue from plat­form pro­ducts, which are our princi­pal pro­ducts and con­si­de­red as one pro­duct class. We offer plat­form pro­ducts that incor­po­ra­te various com­pon­ents and tech­no­lo­gies, inclu­ding a micro­pro­ces­sor and chip­set, a stand-alo­ne SoC, or a mul­ti­chip packa­ge based on Intel archi­tec­tu­re. Plat­form pro­ducts are used in various form fac­tors across our CCG, DCG, and IOTG ope­ra­ting seg­ments. Our non-plat­form, or adja­cent pro­ducts, can be com­bi­ned with plat­form pro­ducts to form com­pre­hen­si­ve plat­form solu­ti­ons to meet cus­to­mer needs.

Reve­nue for our repor­ta­ble and non-repor­ta­ble ope­ra­ting seg­ments is pri­ma­ri­ly rela­ted to the fol­lowing pro­duct lines:

▪       CCG inclu­des plat­forms desi­gned for end-user form fac­tors, focu­sing on hig­her growth seg­ments of 2‑in‑1, thin-and-light, com­mer­cial and gaming, and gro­wing adja­cen­ci­es such as con­nec­ti­vi­ty and graphics.

▪       DCG inclu­des workload-opti­mi­zed plat­forms and rela­ted pro­ducts desi­gned for cloud ser­vice pro­vi­ders, enter­pri­se and government, and com­mu­ni­ca­ti­ons ser­vice pro­vi­ders mar­ket seg­ments. In 2021, the DCG ope­ra­ting seg­ment inclu­des the results of our Intel® Opta­ne™ memo­ry business.

▪       IOTG inclu­des high-per­for­mance com­pu­te solu­ti­ons for tar­ge­ted ver­ti­cals and embed­ded app­li­ca­ti­ons in mar­ket seg­ments such as retail, indus­tri­al, health­ca­re, and vision. 

▪       Mobi­leye inclu­des deve­lo­p­ment of com­pu­ter visi­on and machi­ne lear­ning-based sen­sing, data ana­ly­sis, loca­liz­a­ti­on, map­ping, and dri­ving poli­cy tech­no­lo­gy for advan­ced dri­ver assi­s­tance sys­tems (ADAS) and auto­no­mous driving.

▪       NSG inclu­des deve­lo­p­ment of sto­rage solu­ti­ons using our inno­va­ti­ve Intel® 3D NAND tech­no­lo­gy, pri­ma­ri­ly used in SSDs. In 2021, the NSG ope­ra­ting seg­ment no lon­ger inclu­des the results of our Intel Opta­ne memo­ry business.

▪       PSG inclu­des pro­gramm­a­ble semi­con­duc­tors, pri­ma­ri­ly FPGAs and struc­tu­red ASICs, and rela­ted pro­ducts for com­mu­ni­ca­ti­ons, cloud and enter­pri­se, and embed­ded mar­ket segments.

We have sales and mar­ke­ting, manu­fac­tu­ring, engi­nee­ring, finan­ce, and admi­nis­tra­ti­on groups. Expen­ses for the­se groups are gene­ral­ly allo­ca­ted to the ope­ra­ting segments.

We have an “all other” cate­go­ry that inclu­des reve­nue, expen­ses, and char­ges such as:

▪       results of ope­ra­ti­ons from non-repor­ta­ble seg­ments not other­wi­se presented;

▪       his­to­ri­cal results of ope­ra­ti­ons from dive­s­ted businesses;

▪       results of ope­ra­ti­ons of start-up busi­nes­ses that sup­port our initia­ti­ves, inclu­ding our found­ry business;

▪       amounts inclu­ded wit­hin rest­ruc­tu­ring and other charges;

▪       a por­ti­on of employee bene­fits, com­pen­sa­ti­on, and other expen­ses not allo­ca­ted to the ope­ra­ting seg­ments; and

▪       acqui­si­ti­on-rela­ted cos­ts, inclu­ding amor­tiz­a­ti­on and any impairment of acqui­si­ti­on-rela­ted intan­gi­bles and goodwill.

 

Intel Cor­po­ra­ti­on

Sup­ple­men­tal Plat­form Reve­nue Information

    Q3 2021   Q3 2021   YTD 2021
    com­pa­red to

Q2 2021

  com­pa­red to

Q3 2020

  com­pa­red to

YTD 2020

Cli­ent Com­pu­ting Group            
Desk­top plat­form volumes   11%   16%   8%
Desk­top plat­form average sel­ling prices   2%   4%   (1)%
Note­book plat­form volumes   (26)%   (14)%   24%
Note­book plat­form average sel­ling prices   20%   10%   (12)%
Adja­cent revenue   —%   (35)%   (29)%
             
Data Cen­ter Group            
Plat­form volumes   6%   8%   (2)%
Plat­form average sel­ling prices   (5)%   3%   (6)%
Adja­cent revenue   —%   (1)%   —%

 

 

 

 

Intel Cor­po­ra­ti­on

Explana­ti­on of Non-GAAP Measures

In addi­ti­on to dis­clo­sing finan­cial results in accordance with U.S. GAAP, this docu­ment con­tains refe­ren­ces to the non-GAAP finan­cial mea­su­res below. We belie­ve the­se non-GAAP finan­cial mea­su­res pro­vi­de inves­tors with use­ful sup­ple­men­tal infor­ma­ti­on about our ope­ra­ting per­for­mance, enab­le com­pa­ri­son of finan­cial trends and results bet­ween peri­ods whe­re cer­tain items may vary inde­pen­dent of busi­ness per­for­mance, and allow for grea­ter trans­pa­ren­cy with respect to key metrics used by manage­ment in ope­ra­ting our busi­ness and mea­su­ring our per­for­mance. Cer­tain of the­se non-GAAP finan­cial mea­su­res are used in our per­for­mance-based RSUs and our annu­al cash bonus plan.

Our non-GAAP finan­cial mea­su­res reflect adjus­t­ments based on one or more of the fol­lowing items, as well as the rela­ted inco­me tax effects whe­re app­li­ca­ble. Inco­me tax effects have been cal­cu­la­ted using an appro­pria­te tax rate for each adjus­t­ment. The­se non-GAAP finan­cial mea­su­res should not be con­si­de­red a sub­sti­tu­te for, or supe­ri­or to, finan­cial mea­su­res cal­cu­la­ted in accordance with U.S. GAAP, and the finan­cial results cal­cu­la­ted in accordance with U.S. GAAP and recon­ci­lia­ti­ons from the­se results should be care­ful­ly evaluated.

Non-GAAP adjus­t­ment or measure Defi­ni­ti­on Use­ful­ness to manage­ment and investors
NAND memo­ry business Our NAND memo­ry busi­ness is sub­ject to a pen­ding sale to SK hynix, as announ­ced in Octo­ber 2020. We exclu­de the impact of our NAND memo­ry busi­ness in cer­tain non-GAAP mea­su­res becau­se the­se adjus­t­ments reflect how manage­ment cur­r­ent­ly views the core ope­ra­ti­ons of the com­pa­ny. While the sale of the NAND memo­ry busi­ness is still pen­ding and sub­ject to clo­sing con­di­ti­ons, manage­ment does not cur­r­ent­ly view the busi­ness as part of the company’s core ope­ra­ti­ons or its long-term stra­te­gic direc­tion. We belie­ve the­se adjus­t­ments pro­vi­de inves­tors with a use­ful view, through the eyes of manage­ment, of the company’s core busi­ness model and how manage­ment cur­r­ent­ly eva­lua­tes core ope­ra­tio­nal per­for­mance. We belie­ve they also pro­vi­de inves­tors with an addi­tio­nal means to under­stand the poten­ti­al impact of the dive­s­ti­tu­re over time. In making the­se adjus­t­ments, we have not made any chan­ges to our methods for mea­su­ring and cal­cu­la­ting reve­nue or other finan­cial state­ment amounts.
Acqui­si­ti­on-rela­ted adjustments Amor­tiz­a­ti­on of acqui­si­ti­on-rela­ted intan­gi­ble assets con­sists of amor­tiz­a­ti­on of intan­gi­ble assets such as deve­lo­ped tech­no­lo­gy, brands, and cus­to­mer rela­ti­ons­hips acqui­red in con­nec­tion with busi­ness com­bi­na­ti­ons. Char­ges rela­ted to the amor­tiz­a­ti­on of the­se intan­gi­bles are recor­ded wit­hin both cost of sales and MG&A in our U.S. GAAP finan­cial state­ments. Amor­tiz­a­ti­on char­ges are recor­ded over the esti­ma­ted use­ful life of the rela­ted acqui­red intan­gi­ble asset, and thus are gene­ral­ly recor­ded over mul­ti­ple years. We exclu­de amor­tiz­a­ti­on char­ges for our acqui­si­ti­on-rela­ted intan­gi­ble assets for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se the­se char­ges are incon­sis­tent in size and are signi­fi­cant­ly impac­ted by the timing and valua­ti­on of our acqui­si­ti­ons. The­se adjus­t­ments faci­li­ta­te a use­ful eva­lua­ti­on of our cur­rent ope­ra­ting per­for­mance and com­pa­ri­son to our past ope­ra­ting per­for­mance and pro­vi­de inves­tors with addi­tio­nal means to eva­lua­te cost and expen­se trends.
Rest­ruc­tu­ring and other charges Rest­ruc­tu­ring char­ges are cos­ts asso­cia­ted with a for­mal rest­ruc­tu­ring plan and are pri­ma­ri­ly rela­ted to employee sever­an­ce and bene­fit arran­ge­ments. Other char­ges inclu­de a char­ge rela­ted to the VLSI liti­ga­ti­on, good­will and asset impairments, pen­si­on char­ges, and cos­ts asso­cia­ted with rest­ruc­tu­ring activity. We exclu­de rest­ruc­tu­ring and other char­ges, inclu­ding any adjus­t­ments to char­ges recor­ded in pri­or peri­ods, for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se the­se cos­ts do not reflect our core ope­ra­ting per­for­mance. The­se adjus­t­ments faci­li­ta­te a use­ful eva­lua­ti­on of our core ope­ra­ting per­for­mance and com­pa­ri­sons to past ope­ra­ting results and pro­vi­de inves­tors with addi­tio­nal means to eva­lua­te expen­se trends.
Gains (los­ses) from divestiture Gains or los­ses are reco­gni­zed at the clo­se of a divestiture. We exclu­de gains or los­ses resul­ting from dive­s­ti­tures for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se they do not reflect our cur­rent ope­ra­ting per­for­mance. The­se adjus­t­ments faci­li­ta­te a use­ful eva­lua­ti­on of our cur­rent ope­ra­ting per­for­mance and com­pa­ri­sons to past ope­ra­ting results.
Ongo­ing mark-to-mar­ket on mar­ket­a­ble equi­ty securities After the initi­al mark-to-mar­ket adjus­t­ment is recor­ded upon a secu­ri­ty beco­m­ing mar­ket­a­ble, gains and los­ses are reco­gni­zed from ongo­ing mark-to-mar­ket adjus­t­ments of our mar­ket­a­ble equi­ty securities. We exclu­de the­se ongo­ing gains and los­ses for pur­po­ses of cal­cu­la­ting cer­tain non-GAAP mea­su­res becau­se we do not belie­ve this vola­ti­li­ty cor­re­la­tes to our core ope­ra­tio­nal per­for­mance. The­se adjus­t­ments faci­li­ta­te a use­ful eva­lua­ti­on of our cur­rent ope­ra­ting per­for­mance and com­pa­ri­sons to past ope­ra­ting results.
Free cash flow We refe­rence a non-GAAP finan­cial mea­su­re of free cash flow, which is used by manage­ment when asses­sing our sources of liqui­di­ty, capi­tal resour­ces, and qua­li­ty of ear­nings. Free cash flow is ope­ra­ting cash flow adjus­ted to exclu­de addi­ti­ons to pro­per­ty, plant and equipment. This non-GAAP finan­cial mea­su­re is hel­pful in under­stan­ding our capi­tal requi­re­ments and pro­vi­des an addi­tio­nal means to eva­lua­te the cash flow trends of our busi­ness. In cal­cu­la­ting free cash flow, we do not sub­tract addi­ti­ons to held for sale NAND pro­per­ty, plant and equip­ment becau­se the addi­ti­ons are not repre­sen­ta­ti­ve of our long-term capi­tal requi­re­ments and we expect the­se assets to be sold.

 

Intel Cor­po­ra­ti­on

Sup­ple­men­tal Recon­ci­lia­ti­ons of GAAP Actu­als to Non-GAAP Actuals

Set forth below are recon­ci­lia­ti­ons of the non-GAAP finan­cial mea­su­re to the most direct­ly com­pa­ra­ble U.S. GAAP finan­cial mea­su­re. The­se non-GAAP finan­cial mea­su­res should not be con­si­de­red a sub­sti­tu­te for, or supe­ri­or to, finan­cial mea­su­res cal­cu­la­ted in accordance with U.S. GAAP, and the recon­ci­lia­ti­ons from U.S. GAAP to Non-GAAP actu­als should be care­ful­ly eva­lua­ted. Plea­se refer to “Explana­ti­on of Non-GAAP Mea­su­res” in this docu­ment for a detail­ed explana­ti­on of the adjus­t­ments made to the com­pa­ra­ble U.S. GAAP mea­su­res, the ways manage­ment uses the non-GAAP mea­su­res, and the rea­sons why manage­ment belie­ves the non-GAAP mea­su­res pro­vi­de use­ful infor­ma­ti­on for investors.

    Three Mon­ths Ended
(In Mil­li­ons, Except Per Share Amounts)   Sep 25, 2021   Sep 26, 2020
GAAP net revenue   $ 19,192      $ 18,333   
NAND memo­ry business   (1,105)     (1,067)  
Non-GAAP net revenue   $ 18,087      $ 17,266   
         
GAAP gross margin   $ 10,746      $ 9,741   
Acqui­si­ti­on-rela­ted adjustments   322      310   
NAND memo­ry business   (616)     (303)  
Non-GAAP gross margin   $ 10,452      $ 9,748   
         
GAAP gross mar­gin percentage   56.0  %   53.1  %
Acqui­si­ti­on-rela­ted adjustments   1.7  %   1.7  %
NAND memo­ry business   0.1  %   1.6  %
Non-GAAP gross mar­gin per­cen­ta­ge1   57.8  %   56.5  %
         
GAAP R&D and MG&A   $ 5,477      $ 4,707   
Acqui­si­ti­on-rela­ted adjustments   (53)     (52)  
NAND memo­ry business   (174)     (158)  
Non-GAAP R&D and MG&A   $ 5,250      $ 4,497   
         
GAAP ope­ra­ting income   $ 5,227      $ 5,059   
Acqui­si­ti­on-rela­ted adjustments   375      362   
Rest­ruc­tu­ring and other charges   42      (25)  
NAND memo­ry business   (442)     (145)  
Non-GAAP ope­ra­ting income   $ 5,202      $ 5,251   
         
GAAP ope­ra­ting margin   27.2  %   27.6  %
Acqui­si­ti­on-rela­ted adjustments   2.0  %   2.0  %
Rest­ruc­tu­ring and other charges   0.2  %   (0.1) %
NAND memo­ry business   (0.6) %   0.9  %
Non-GAAP ope­ra­ting mar­gin1   28.8  %   30.4  %
         
GAAP tax rate   0.5  %   15.2  %
Inco­me tax effects   (0.1) %   0.2  %
Non-GAAP tax rate   0.4  %   15.4  %
         
GAAP net income   $ 6,823      $ 4,276   
Acqui­si­ti­on-rela­ted adjustments   375      362   
Rest­ruc­tu­ring and other charges   42      (25)  
(Gains) los­ses from divestiture   —      (6)  
Ongo­ing mark-to-mar­ket on mar­ket­a­ble equi­ty securities   192      146   
NAND memo­ry business   (442)     (145)  
Inco­me tax effects       (62)  
Non-GAAP net income   $ 6,997      $ 4,546   
1  Our recon­ci­lia­ti­ons of GAAP to non-GAAP gross mar­gin and ope­ra­ting mar­gin per­cen­ta­ge reflect the exclu­si­on of our NAND memo­ry               busi­ness from net revenue.
(In Mil­li­ons, Except Per Share Amounts)   Sep 25, 2021   Sep 26, 2020
GAAP ear­nings per share—diluted   $ 1.67      $ 1.02   
Acqui­si­ti­on-rela­ted adjustments   0.09      0.09   
Rest­ruc­tu­ring and other charges   0.01      (0.01)  
(Gains) los­ses from divestiture   —      —   
Ongo­ing mark-to-mar­ket on mar­ket­a­ble equi­ty securities   0.04      0.03   
NAND memo­ry business   (0.10)     (0.04)  
Inco­me tax effects   —      (0.01)  
Non-GAAP ear­nings per share—diluted   $ 1.71      $ 1.08   

 

    Three Mon­ths Ended
(In Mil­li­ons)   Sep 25, 2021
GAAP cash from operations   $ 9,900   
Addi­ti­ons to pro­per­ty, plant and equipment   (4,006)  
Free cash flow   $ 5,894   
GAAP cash used for inves­ting activities   $ (10,682)  
GAAP cash pro­vi­ded by (used for) finan­cing activities   $ 3,906   

 

 

Intel Cor­po­ra­ti­on

Sup­ple­men­tal Recon­ci­lia­ti­ons of GAAP Out­look to Non-GAAP Outlook

Set forth below are recon­ci­lia­ti­ons of the non-GAAP finan­cial mea­su­re to the most direct­ly com­pa­ra­ble U.S. GAAP finan­cial mea­su­re. The­se non-GAAP finan­cial mea­su­res should not be con­si­de­red a sub­sti­tu­te for, or supe­ri­or to, finan­cial mea­su­res cal­cu­la­ted in accordance with U.S. GAAP, and the finan­cial out­look pre­pa­red in accordance with U.S. GAAP and the recon­ci­lia­ti­ons from this Busi­ness Out­look should be care­ful­ly evaluated.

Plea­se refer to “Explana­ti­on of Non-GAAP Mea­su­res” in this docu­ment for a detail­ed explana­ti­on of the adjus­t­ments made to the com­pa­ra­ble U.S. GAAP mea­su­res, the ways manage­ment uses the non-GAAP mea­su­res, and the rea­sons why manage­ment belie­ves the non-GAAP mea­su­res pro­vi­de use­ful infor­ma­ti­on for investors.

(In Bil­li­ons, Except Per Share Amounts)   Q4 2021 Outlook   Full-Year 2021
    Appro­xi­mate­ly   Appro­xi­mate­ly
GAAP net revenue   $ 19.2      $ 77.7   
NAND memo­ry business   (0.9)     (4.2)  
Non-GAAP net revenue   $ 18.3      $ 73.5   
         
GAAP gross margin   51.4  %   54.9  %
Amor­tiz­a­ti­on of acqui­si­ti­on-rela­ted intan­gi­ble assets   1.7  %   1.6  %
NAND memo­ry business   0.3  %   0.7  %
Non-GAAP gross mar­gin1   53.5  %   57.2  %
         
GAAP tax rate   37  %   15  %
Inco­me tax effects   (24) %   (6) %
Non-GAAP tax rate   13  %   %
         
GAAP ear­nings per share—diluted   $ 0.78      $ 4.50   
Acqui­si­ti­on-rela­ted adjustments   0.09      0.36   
Rest­ruc­tu­ring and other charges   —      0.64   
(Gains) los­ses from divestiture   (0.24)     (0.24)  
Ongo­ing mark-to-mar­ket on mar­ket­a­ble equi­ty securities   —      0.08   
NAND memo­ry business   (0.06)     (0.32)  
Inco­me tax effects   0.33      0.26   
Non-GAAP ear­nings per share—diluted   $ 0.90      $ 5.28   

1    Our recon­ci­lia­ti­on of GAAP Out­look to non-GAAP Out­look gross mar­gin per­cen­ta­ge reflects the exclu­si­on of our NAND memo­ry busi­ness from net revenue.

 

(In Bil­li­ons)   Full-Year 2021
GAAP cash from operations   $ 31.0   
Addi­ti­ons to pro­per­ty, plant and equipment   $ 18.5   
Free cash flow   $ 12.5   

 

Released Oct 21, 2021 • 4:00 PM EDT

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