Intel Reports Third-Quarter 2021 Financial Results

News Sum짯ma짯ry

뼧       Third-quar짯ter GAAP reve짯nue of $19.2 bil짯li짯on, up 5% year over year (YoY), and non-GAAP reve짯nue of $18.1 bil짯li짯on, up 5% YoY.  Achie짯ved all-time record reve짯nue in Intel셲 Inter짯net of Things Group (IOTG) and record third-quar짯ter reve짯nue in the Data Cen짯ter Group (DCG) and Mobi짯leye businesses. 

뼧       Third-quar짯ter GAAP ear짯nings-per-share (EPS) was $1.67; non-GAAP EPS was $1.71, which excee짯ded July gui짯dance by $0.61. Excee짯ded July gui짯dance for EPS and gross margin.

뼧      Rai짯sing full-year 2021 EPS and gross mar짯gin gui짯dance. Now expec짯ting GAAP EPS of $4.50 and non-GAAP EPS of $5.28 and GAAP gross mar짯gin of 55% and non-GAAP gross mar짯gin of 57%1.

뼧       Intel CFO Geor짯ge Davis announ짯ced plans to reti짯re in May 2022.

 

SANTA CLARA, Calif., Octo짯ber 21, 2021 Intel Cor짯po짯ra짯ti짯on today repor짯ted third-quar짯ter 2021 finan짯cial results.

Q3 sho짯ne an even grea짯ter spot짯light on the glo짯bal demand for semi짯con짯duc짯tors, whe짯re Intel has the uni짯que breadth and sca짯le to lead. Our focus on exe짯cu짯ti짯on con짯tin짯ued as we star짯ted deli짯ve짯ring on our IDM 2.0 com짯mit짯ments. We bro짯ke ground on new fabs, shared our acce짯le짯ra짯ted path to regain pro짯cess per짯for짯mance lea짯der짯ship, and unvei짯led our most dra짯ma짯tic archi짯tec짯tu짯ral inno짯va짯tions in a deca짯de. We also announ짯ced major cus짯to짯mer wins across every part of our busi짯ness, said Pat Gel짯sin짯ger, Intel CEO. 쏻e are still in the ear짯ly stages of our jour짯ney, but I see the enorm짯ous oppor짯tu짯ni짯ty ahead, and I couldn셳 be prou짯der of the pro짯gress we are making towards that opportunity.

Q3 2021 Finan짯cial Highlights

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

In the third quar짯ter, the com짯pa짯ny gene짯ra짯ted $9.9 bil짯li짯on in cash from ope짯ra짯ti짯ons and paid divi짯dends of $1.4 billion.

Intel CFO Geor짯ge Davis announ짯ced plans to reti짯re from Intel in May 2022. He will con짯ti짯nue to ser짯ve in his cur짯rent role while Intel con짯ducts a search for a new CFO and until his suc짯ces짯sor is appointed.

 

Busi짯ness Unit Summary

Key Busi짯ness Unit Reve짯nue and Trends   Q3 2021   vs. Q3 2020
CCG   $9.7 bil짯li짯on   down 2%
DCG   $6.5 bil짯li짯on   up 10%
Inter짯net of Things          
IOTG   $1.0 bil짯li짯on   up 54%
Mobi짯leye   $326 mil짯li짯on   up 39%
NSG   $1.1 bil짯li짯on   down 4%
PSG   $478 mil짯li짯on   up 16%
           

Third-quar짯ter reve짯nue was led by strong reco짯very in the Enter짯pri짯se por짯ti짯on of DCG and in IOTG, which saw hig짯her demand amid reco짯very from the eco짯no짯mic impacts of COVID-19.  The Cli짯ent Com짯pu짯ting Group (CCG) was down due to lower note짯book volu짯mes due to indus짯try-wide com짯po짯nent shorta짯ges, and on lower adja짯cent reve짯nue, par짯ti짯al짯ly off짯set by hig짯her avera짯ge sel짯ling pri짯ces (ASPs) and strength in desktop.

Busi짯ness Highlights

뼧       Sel짯ec짯ted by the U.S. govern짯ment to pro짯vi짯de com짯mer짯cial foundry ser짯vices for the government셲 RAMP멌 program. 

뼧       Announ짯ced Ama짯zon as first cus짯to짯mer to use Intel Foundry Ser짯vices pack짯a짯ging ser짯vices, and a part짯ner짯ship with Qual짯comm to use the future Intel 20A pro짯cess technology.

뼧       Bro짯ke ground on two new lea짯ding-edge chip fac짯to짯ries at Intel셲 Oco짯t짯il짯lo cam짯pus in Chand짯ler, Ari짯zo짯na, three months ahead of schedule.

뼧       Shared pro짯cess and pack짯a짯ging road짯map updates for deli짯ve짯ring five nodes within four years, put짯ting Intel on a path to res짯to짯re pro짯cess per짯for짯mance per watt pari짯ty in 2024 and lea짯der짯ship in 2025 with key pro짯cess inno짯va짯tions, inclu짯ding Rib짯bon짯FET and Power짯Via. Also intro짯du짯ced new advan짯ced pack짯a짯ging tech짯no짯lo짯gies, Fove짯r짯os Omni and Fove짯r짯os Direct, for 2023.

뼧       Detail짯ed Intel셲 big짯gest archi짯tec짯tu짯ral shifts in a gene짯ra짯ti짯on with the first in-depth look at Alder Lake, our first per짯for짯mance hybrid archi짯tec짯tu짯re with two new gene짯ra짯ti짯ons of x86 cores; Sap짯phi짯re Rapids, our new stan짯dard-set짯ting data cen짯ter archi짯tec짯tu짯re; our new dis짯crete gam짯ing gra짯phics pro짯ces짯sing unit archi짯tec짯tu짯re; new infra짯struc짯tu짯re pro짯ces짯sing units; and Pon짯te Vec짯chio, our tour-de-force GPU archi짯tec짯tu짯re with Intel셲 hig짯hest ever com짯pu짯te den짯si짯ty to acce짯le짯ra짯te AI, HPC, and advan짯ced ana짯ly짯tics workloads.

뼧       Intro짯du짯ced the new Intel Arc brand for our upco짯ming high-per짯for짯mance gra짯phics pro짯ducts, cove짯ring hard짯ware and soft짯ware, and services. 

뼧       Intro짯du짯ced four new Intel Core pro짯ces짯sor-based Sur짯face design wins with Micro짯soft, inclu짯ding the first Sur짯face device to be Intel짰 Evo꽓 plat짯form veri짯fied, and two designs that bring Thun짯der짯bolt con짯nec짯ti짯vi짯ty to the Sur짯face lineup.

뼧       Announ짯ced avai짯la짯bi짯li짯ty of the 3rd Gen Intel짰 Xeon짰 Sca짯lable pro짯ces짯sor (Ice Lake) for AWS cus짯to짯mers via the new Ama짯zon Ela짯s짯tic Com짯pu짯te Cloud (Ama짯zon EC2) M6i ins짯tances and for Goog짯le Cloud cus짯to짯mers via the new Com짯pu짯te Engi짯ne N2

뼧       Announ짯ced U.S. Depart짯ment of Ener짯gy sel짯ec짯ted next-gene짯ra짯ti짯on Intel Xeon Sca짯lable pro짯ces짯sors (Sap짯phi짯re Rapids) to power supercomputers.

뼧       Announ짯ced stra짯te짯gic glo짯bal part짯ner짯ships with ZEEKR and Sixt SE and addi짯tio짯nal plans to unveil Mobileye셲 robo짯ta짯xi equip짯ped with the Mobi짯leye Dri짯ve꽓 system.

뼧       Intro짯du짯ced second-gene짯ra짯ti짯on neu짯ro짯mor짯phic rese짯arch chip, Loihi 2, fabri짯ca짯ted with a pre-pro짯duc짯tion ver짯si짯on of the Intel 4 process. 

As part of its IDM 2.0 stra짯tegy, Intel will be making a series of pro짯duct and tech짯no짯lo짯gy announce짯ments at its upco짯ming Inno짯va짯ti짯on vir짯tu짯al event on Octo짯ber 2728, 2021. The con짯fe짯rence is desi짯gned for deve짯lo짯pers, indus짯try insi짯ders, and will fea짯ture tech짯ni짯cal ses짯si짯ons on Intel셲 AI, 5G, edge, cloud con짯nec짯ti짯vi짯ty, and cli짯ent appli짯ca짯ti짯ons. Join the public web짯cast and fol짯low the news at newsroom.intel.com at 9 a.m. PDT on Wed짯nes짯day, Octo짯ber 27th, 2021.

Addi짯tio짯nal infor짯ma짯ti짯on regar짯ding Intel셲 results can be found in the Q321 Ear짯nings Pre짯sen짯ta짯ti짯on available at:

www.intc.com.

 

Busi짯ness Outlook

Intel셲 gui짯dance for the fourth quar짯ter and full year includes both GAAP and non-GAAP esti짯ma짯tes. Our non-GAAP mea짯su짯res exclude the NAND memo짯ry busi짯ness, which is sub짯ject to a pre짯vious짯ly-announ짯ced pen짯ding sale, as well as cer짯tain other items. Recon짯ci짯lia짯ti짯ons bet짯ween GAAP and non-GAAP finan짯cial mea짯su짯res are included below.

Q4 2021   GAAP   Non-GAAP
    Appro짯xi짯m짯ate짯ly   Appro짯xi짯m짯ate짯ly
Reve짯nue   $19.2 bil짯li짯on   $18.3 bil짯li짯on
Gross Mar짯gin   51.4%   53.5%
Tax rate   37%   13%
Ear짯nings per share   $0.78   $0.90

 

 

Full-Year 2021   GAAP   Non-GAAP
    Appro짯xi짯m짯ate짯ly   Appro짯xi짯m짯ate짯ly
Reve짯nue   $77.7 bil짯li짯on   $73.5 bil짯li짯on
Gross Mar짯gin   55%   57%
Tax rate   15%   9%
Ear짯nings per share   $4.50   $5.28
Full-year capi짯tal spending   $18.019.0 bil짯li짯on   $18.019.0 bil짯li짯on^
Free cash flow   N/A   $12.5 bil짯li짯on

Actu짯al results may dif짯fer mate짯ri짯al짯ly from Intel셲 Busi짯ness Out짯look as a result of, among other things, the fac짯tors descri짯bed under 쏤or짯ward-Loo짯king State짯ments below.

Ear짯nings Webcast

Intel will hold a public web짯cast at 2 p.m. PDT today to dis짯cuss the results for its third quar짯ter of 2021. The live public web짯cast can be acces짯sed on Intel셲 Inves짯tor Rela짯ti짯ons web짯site at www.intc.com. The Q321 Ear짯nings Pre짯sen짯ta짯ti짯on, web짯cast replay, and audio down짯load will also be available on the site. 

Intel plans to report its ear짯nings for the fourth quar짯ter of 2021 on Janu짯ary 26, 2022 prompt짯ly after clo짯se of mar짯ket; rela짯ted mate짯ri짯als will be available at www.intc.com. A public web짯cast of Intel셲 ear짯nings con짯fe짯rence call will fol짯low at 2 p.m. PDT at www.intc.com.

 

Inves짯tor Meeting

Intel셲 Inves짯tor Mee짯ting is now plan짯ned for Febru짯ary 17, 2022. On today셲 ear짯nings web짯cast, Intel will pro짯vi짯de addi짯tio짯nal infor짯ma짯ti짯on regar짯ding its long-term out짯look and plans.

 

For짯ward-Loo짯king Statements

Intel셲 Busi짯ness Out짯look and other state짯ments in this release that refer to future plans and expec짯ta짯ti짯ons are for짯ward-loo짯king state짯ments that invol짯ve a num짯ber of risks and uncer짯tain짯ties. Words such as 쏿nti짯ci짯pa짯tes, 쐃xpects, 쐇ntends, 쐅oals, 쐏lans, 쐅ui짯dance, 쐀elie짯ves, 쐓eeks, 쐃sti짯ma짯tes, 쐁on짯ti짯nues, 쐁om짯mit짯ted, 쐎n-track, 쐌ay, 쐗ill, 쐗ould, 쐓hould, 쐁ould, 쏿cce짯le짯ra짯te, 쐒amp, 쐂eli짯ver, 쐏ath, 쐒oad짯map, 쐏ro짯gress, 쐄ore짯cast, 쐋ikely, 쐄uture, 쐏oten짯ti짯al, 쐏osi짯tio짯ned, 쐇ncre짯asing, 쐎ppor짯tu짯ni짯ty, 쐕pco짯ming and varia짯ti짯ons of such words and simi짯lar expres짯si짯ons are inten짯ded to iden짯ti짯fy such for짯ward-loo짯king state짯ments. State짯ments that refer to or are based on esti짯ma짯tes, fore짯casts, pro짯jec짯tions, uncer짯tain events or assump짯ti짯ons, inclu짯ding state짯ments rela짯ting to Intel셲 stra짯tegy; manu짯fac짯tu짯ring expan짯si짯on and invest짯ment plans; plans and goals rela짯ted to Intel셲 foundry busi짯ness; sup짯p짯ly expec짯ta짯ti짯ons, inclu짯ding regar짯ding indus짯try shorta짯ges and suf짯fi짯ci짯en짯cy of future sup짯p짯ly; pen짯ding tran짯sac짯tions, inclu짯ding the pen짯ding sale of our NAND memo짯ry busi짯ness; total addressa짯ble mar짯ket (TAM) and mar짯ket oppor짯tu짯ni짯ty; busi짯ness plans and finan짯cial expec짯ta짯ti짯ons; future macroe짯co짯no짯mic con짯di짯ti짯ons; future legis짯la짯ti짯on; future impacts of the COVID-19 pan짯de짯mic; future pro짯ducts, tech짯no짯lo짯gy, and ser짯vices, and the expec짯ted avai짯la짯bi짯li짯ty and bene짯fits of such pro짯ducts, tech짯no짯lo짯gy, and ser짯vices, inclu짯ding pro짯duct ramps, manu짯fac짯tu짯ring goals, plans, time짯lines, and future pro짯gress, future pro짯cess nodes and tech짯no짯lo짯gies inclu짯ding Intel 20A, Rib짯bon짯FET, and Power짯Via, pro짯cess per짯for짯mance pari짯ty and lea짯der짯ship expec짯ta짯ti짯ons, future pro짯duct archi짯tec짯tures, Alder Lake, Sap짯phi짯re Rapids, and future GPU and IPU pro짯ducts; expec짯ta짯ti짯ons regar짯ding cus짯to짯mers, inclu짯ding with respect to designs, wins, orders, and part짯ner짯ships; pro짯jec짯tions regar짯ding com짯pe짯ti짯tors; and anti짯ci짯pa짯ted trends in our busi짯nesses or the mar짯kets rele짯vant to them, inclu짯ding with respect to future demand and indus짯try growth, also iden짯ti짯fy for짯ward-loo짯king state짯ments. All for짯ward-loo짯king state짯ments included in this release are based on management셲 expec짯ta짯ti짯ons as of the date of this release and, except as requi짯red by law, Intel dis짯claims any obli짯ga짯ti짯on to update the짯se for짯ward-loo짯king state짯ments to reflect future events or cir짯cum짯s짯tances. For짯ward-loo짯king state짯ments invol짯ve many risks and uncer짯tain짯ties that could cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly from tho짯se expres짯sed or impli짯ed in such state짯ments. Intel pre짯sent짯ly con짯siders the fol짯lo짯wing to be among the important fac짯tors that can cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly from the company셲 expectations.

뼧       Demand for Intel셲 pro짯ducts is high짯ly varia짯ble and can dif짯fer from expec짯ta짯ti짯ons due to fac짯tors inclu짯ding chan짯ges in busi짯ness and eco짯no짯mic con짯di짯ti짯ons; cus짯to짯mer con짯fi짯dence or inco짯me levels, and the levels of cus짯to짯mer capi짯tal spen짯ding; the intro짯duc짯tion, avai짯la짯bi짯li짯ty, and mar짯ket accep짯tance of Intel셲 pro짯ducts, pro짯ducts used tog짯e짯ther with Intel pro짯ducts, and com짯pe짯ti짯tors pro짯ducts; com짯pe짯ti짯ti짯ve and pri짯cing pres짯su짯res, inclu짯ding actions taken by com짯pe짯ti짯tors; sup짯p짯ly cons짯traints and other dis짯rup짯ti짯ons affec짯ting cus짯to짯mers; chan짯ges in cus짯to짯mer order pat짯terns inclu짯ding order can짯cel짯la짯ti짯ons; chan짯ges in cus짯to짯mer needs and emer짯ging tech짯no짯lo짯gy trends; and chan짯ges in the level of inven짯to짯ry and com짯pu짯ting capa짯ci짯ty at customers.

뼧       Intel셲 results can vary signi짯fi짯cant짯ly from expec짯ta짯ti짯ons based on capa짯ci짯ty uti짯liza짯ti짯on; varia짯ti짯ons in inven짯to짯ry valua짯ti짯on, inclu짯ding varia짯ti짯ons rela짯ted to the timing of qua짯li짯fy짯ing pro짯ducts for sale; chan짯ges in reve짯nue levels; seg짯ment pro짯duct mix; the timing and exe짯cu짯ti짯on of the manu짯fac짯tu짯ring ramp and asso짯cia짯ted cos짯ts; excess or obso짯le짯te inven짯to짯ry; chan짯ges in unit cos짯ts; defects or dis짯rup짯ti짯ons in the sup짯p짯ly of mate짯ri짯als or resour짯ces, inclu짯ding as a result of ongo짯ing indus짯try shorta짯ges of com짯pon짯ents and sub짯stra짯tes; pro짯duct manu짯fac짯tu짯ring quality/yields; and chan짯ges in capi짯tal requi짯re짯ments and invest짯ment plans. Varia짯ti짯ons in results can also be cau짯sed by the timing of Intel pro짯duct intro짯duc짯tions and rela짯ted expen짯ses, inclu짯ding mar짯ke짯ting pro짯grams, and Intel셲 abili짯ty to respond quick짯ly to tech짯no짯lo짯gi짯cal deve짯lo짯p짯ments and to intro짯du짯ce new pro짯ducts or incor짯po짯ra짯te new fea짯tures into exis짯ting pro짯ducts, as well as decis짯i짯ons to exit pro짯duct lines or busi짯nesses, which can result in res짯truc짯tu짯ring and asset impair짯ment charges.

뼧       Intel셲 results can be affec짯ted by adver짯se eco짯no짯mic, social, poli짯ti짯cal, regu짯la짯to짯ry, and physical/infrastructure con짯di짯ti짯ons in count짯ries whe짯re Intel, its cus짯to짯mers or its sup짯pli짯ers ope짯ra짯te, inclu짯ding reces짯si짯on or slo짯wing growth, mili짯ta짯ry con짯flict and other secu짯ri짯ty risks, natu짯ral dis짯as짯ters, infra짯struc짯tu짯re dis짯rup짯ti짯ons, health con짯cerns (inclu짯ding the COVID-19 pan짯de짯mic), fluc짯tua짯tions in cur짯ren짯cy exch짯an짯ge rates, sanc짯tions and tariffs, poli짯ti짯cal dis짯pu짯tes, chan짯ges in govern짯ment grants and incen짯ti짯ves, and con짯ti짯nuing uncer짯tain짯ty regar짯ding social, poli짯ti짯cal, immi짯gra짯ti짯on, and tax and trade poli짯ci짯es in the U.S. and abroad. Results can also be affec짯ted by the for짯mal or infor짯mal impo짯si짯ti짯on by count짯ries of new or revi짯sed export and/or import and doing-busi짯ness regu짯la짯ti짯ons, inclu짯ding chan짯ges or uncer짯tain짯ty rela짯ted to the U.S. govern짯ment enti짯ty list and chan짯ges in the abili짯ty to obtain export licen짯ses, which can be chan짯ged wit짯hout pri짯or notice.

뼧       The COVID-19 pan짯de짯mic has pre짯vious짯ly adver짯se짯ly affec짯ted signi짯fi짯cant por짯ti짯ons of Intel셲 busi짯ness and could have a mate짯ri짯al adver짯se effect on Intel셲 finan짯cial con짯di짯ti짯on and results of ope짯ra짯ti짯ons. The pan짯de짯mic has resul짯ted in aut짯ho짯ri짯ties impo짯sing num짯e짯rous mea짯su짯res to try to con짯tain the virus. The짯se mea짯su짯res have impac짯ted and may fur짯ther impact our work짯force and ope짯ra짯ti짯ons, the ope짯ra짯ti짯ons of our cus짯to짯mers, and tho짯se of our respec짯ti짯ve ven짯dors, sup짯pli짯ers, and part짯ners. Rest짯ric짯tions on our manu짯fac짯tu짯ring or sup짯port ope짯ra짯ti짯ons or work짯force, or simi짯lar limi짯ta짯ti짯ons for our ven짯dors and sup짯pli짯ers, can impact our abili짯ty to meet cus짯to짯mer demand and could have a mate짯ri짯al adver짯se effect on us. Rest짯ric짯tions or dis짯rup짯ti짯ons of trans짯por짯ta짯ti짯on, or dis짯rup짯ti짯ons in our cus짯to짯mers ope짯ra짯ti짯ons and sup짯p짯ly chains, may adver짯se짯ly affect our results of ope짯ra짯ti짯ons. The pan짯de짯mic has cau짯sed us to modi짯fy our busi짯ness prac짯ti짯ces. The짯re is no cer짯tain짯ty that such mea짯su짯res will be suf짯fi짯ci짯ent to miti짯ga짯te the risks posed by the virus, and ill짯ness and work짯force dis짯rup짯ti짯ons could lead to unavai짯la짯bi짯li짯ty of our key per짯son짯nel and harm our abili짯ty to per짯form cri짯ti짯cal func짯tions. The pan짯de짯mic has signi짯fi짯cant짯ly increased eco짯no짯mic and demand uncer짯tain짯ty. Demand for our pro짯ducts could be mate짯ri짯al짯ly har짯med in the future. The pan짯de짯mic could lead to increased dis짯rup짯ti짯on and vola짯ti짯li짯ty in capi짯tal mar짯kets and cre짯dit mar짯kets, which could adver짯se짯ly affect our liqui짯di짯ty and capi짯tal resour짯ces. The degree to which COVID-19 impacts our results will depend on future deve짯lo짯p짯ments, which are high짯ly uncer짯tain. The impact of the pan짯de짯mic can also exa짯cer짯ba짯te other risks dis짯cus짯sed in this section.

뼧       Intel ope짯ra짯tes in high짯ly com짯pe짯ti짯ti짯ve indus짯tries and its ope짯ra짯ti짯ons have high cos짯ts that are eit짯her fixed or dif짯fi짯cult to redu짯ce in the short term. In addi짯ti짯on, we have ente짯red new are짯as and intro짯du짯ced adja짯cent pro짯ducts, such as our inten짯ti짯on to beco짯me a major pro짯vi짯der of foundry ser짯vices, and we face new sources of com짯pe짯ti짯ti짯on and uncer짯tain mar짯ket demand or accep짯tance of our offe짯rings with respect to the짯se new are짯as and pro짯ducts, and they do not always grow as projected.

뼧       Intel셲 expec짯ted tax rate is based on cur짯rent tax law, inclu짯ding cur짯rent inter짯pre짯ta짯ti짯ons of the Tax Cuts and Jobs Act of 2017 (TCJA), and cur짯rent expec짯ted inco짯me and can be affec짯ted by chan짯ges in inter짯pre짯ta짯ti짯ons of TCJA and other laws; chan짯ges in the volu짯me and mix of pro짯fits ear짯ned and loca짯ti짯on of assets across juris짯dic짯tions with vary짯ing tax rates; chan짯ges in the esti짯ma짯tes of cre짯dits, bene짯fits, and deduc짯tions; the reso짯lu짯ti짯on of issues ari짯sing from tax audits with various tax aut짯ho짯ri짯ties, inclu짯ding pay짯ment of inte짯rest and pen짯al짯ties; and the abili짯ty to rea짯li짯ze defer짯red tax assets.

뼧       Intel셲 results can be affec짯ted by gains or los짯ses from equi짯ty secu짯ri짯ties and inte짯rest and other, which can vary depen짯ding on gains or los짯ses on the chan짯ge in fair value, sale, exch짯an짯ge, or impairm짯ents of equi짯ty and debt invest짯ments, inte짯rest rates, cash balan짯ces, and chan짯ges in fair value of deri짯va짯ti짯ve instruments. 

뼧       Pro짯duct defects or erra짯ta (devia짯ti짯ons from published spe짯ci짯fi짯ca짯ti짯ons) can adver짯se짯ly impact our expen짯ses, reve짯nues, and reputation.

뼧       We or third par짯ties regu짯lar짯ly iden짯ti짯fy secu짯ri짯ty vul짯nerabi짯li짯ties with respect to our pro짯ces짯sors and other pro짯ducts as well as the ope짯ra짯ting sys짯tems and workloads run짯ning on them. Secu짯ri짯ty vul짯nerabi짯li짯ties and any limi짯ta짯ti짯ons of, or adver짯se effects resul짯ting from, miti짯ga짯ti짯on tech짯ni짯ques can adver짯se짯ly affect our results of ope짯ra짯ti짯ons, finan짯cial con짯di짯ti짯on, cus짯to짯mer rela짯ti짯onships, pro짯s짯pects, and repu짯ta짯ti짯on in a num짯ber of ways, any of which may be mate짯ri짯al, inclu짯ding incur짯ring signi짯fi짯cant cos짯ts rela짯ted to deve짯lo짯ping and deploy짯ing updates and miti짯ga짯ti짯ons, wri짯ting down inven짯to짯ry value, a reduc짯tion in the com짯pe짯ti짯ti짯ve짯ness of our pro짯ducts, defen짯ding against pro짯duct claims and liti짯ga짯ti짯on, respon짯ding to regu짯la짯to짯ry inqui짯ries or actions, pay짯ing dama짯ges, addres짯sing cus짯to짯mer satis짯fac짯tion con짯side짯ra짯ti짯ons, or taking other reme짯di짯al steps with respect to third par짯ties. Adver짯se publi짯ci짯ty about secu짯ri짯ty vul짯nerabi짯li짯ties or miti짯ga짯ti짯ons could dama짯ge our repu짯ta짯ti짯on with cus짯to짯mers or users and redu짯ce demand for our pro짯ducts and services.

뼧       Cyber짯se짯cu짯ri짯ty inci짯dents, whe짯ther or not suc짯cessful, can affect Intel셲 results by caus짯ing us to incur signi짯fi짯cant cos짯ts or dis짯rupt짯ing our ope짯ra짯ti짯ons or tho짯se of our cus짯to짯mers and sup짯pli짯ers, and can result in repu짯ta짯tio짯nal harm.

뼧       Intel셲 results can be affec짯ted by liti짯ga짯ti짯on or regu짯la짯to짯ry mat짯ters invol짯ving intellec짯tu짯al pro짯per짯ty, stock짯hol짯der, con짯su짯mer, anti짯trust, com짯mer짯cial, dis짯clo짯sure, and other issues, as well as by the impact and timing of sett짯le짯ments and dis짯pu짯te reso짯lu짯ti짯ons. For exam짯p짯le, in the first quar짯ter of 2021, Intel accrued a $2.2 bil짯li짯on char짯ge rela짯ted to liti짯ga짯ti짯on invol짯ving VLSI Tech짯no짯lo짯gy LLC (VLSI). An unfa짯vorable ruling can include mone짯ta짯ry dama짯ges or an injunc짯tion pro짯hi짯bi짯ting us from manu짯fac짯tu짯ring or sel짯ling one or more pro짯ducts, pre짯clu짯ding par짯ti짯cu짯lar busi짯ness prac짯ti짯ces, impac짯ting our abili짯ty to design pro짯ducts, or requi짯ring other reme짯dies such as com짯pul짯so짯ry licen짯sing of intellec짯tu짯al property.

뼧       Intel셲 results can be affec짯ted by the impact and timing of clo짯sing of acqui짯si짯ti짯ons, dives짯ti짯tures, and other signi짯fi짯cant tran짯sac짯tions. In addi짯ti짯on, the짯se tran짯sac짯tions do not always achie짯ve our finan짯cial or stra짯te짯gic objec짯ti짯ves and can dis짯rupt our ongo짯ing busi짯ness and adver짯se짯ly impact our results of ope짯ra짯ti짯ons. We may not rea짯li짯ze the expec짯ted bene짯fits of port짯fo짯lio decis짯i짯ons due to num짯e짯rous risks, inclu짯ding unfa짯vorable pri짯ces and terms; chan짯ges in mar짯ket con짯di짯ti짯ons; limi짯ta짯ti짯ons due to regu짯la짯to짯ry or govern짯men짯tal appr짯ovals, con짯trac짯tu짯al terms, or other con짯di짯ti짯ons; and poten짯ti짯al con짯tin짯ued finan짯cial obli짯ga짯ti짯ons asso짯cia짯ted with such tran짯sac짯tions. Risks and uncer짯tain짯ties rela짯ting to the pen짯ding sale of our NAND memo짯ry busi짯ness to SK hynix are descri짯bed in our Form 10멚 filed with the SEC on Janu짯ary 22, 2021.

뼧       The amount, timing, and exe짯cu짯ti짯on of Intel셲 stock repurcha짯se pro짯gram fluc짯tua짯te based on Intel셲 prio짯ri짯ties for the use of cash for other purposes봲uch as inves짯t짯ing in our busi짯ness, inclu짯ding ope짯ra짯tio짯nal and capi짯tal spen짯ding, acqui짯si짯ti짯ons, and retur짯ning cash to our stock짯hol짯ders as divi짯dend payments봞nd becau짯se of chan짯ges in cash flows, tax laws, and other laws, or the mar짯ket pri짯ce of our com짯mon stock.

Detail짯ed infor짯ma짯ti짯on regar짯ding the짯se and other fac짯tors that could affect Intel셲 busi짯ness and results is included in Intel셲 SEC filings, inclu짯ding the company셲 most recent reports on Forms 10멚 and 10멡, par짯ti짯cu짯lar짯ly the 쏳isk Fac짯tors sec짯tions of tho짯se reports. Copies of the짯se filings may be obtai짯ned by visi짯ting our Inves짯tor Rela짯ti짯ons web짯site at www.intc.com or the SEC셲 web짯site at www.sec.gov.

 

About Intel

Intel (Nasdaq: INTC) is an indus짯try lea짯der, crea짯ting world-chan짯ging tech짯no짯lo짯gy that enables glo짯bal pro짯gress and enri짯ches lives. Inspi짯red by Moore셲 Law, we con짯ti짯nuous짯ly work to advan짯ce the design and manu짯fac짯tu짯ring of semi짯con짯duc짯tors to help address our cus짯to짯mers grea짯test chal짯lenges. By embed짯ding intel짯li짯gence in the cloud, net짯work, edge and every kind of com짯pu짯ting device, we unleash the poten짯ti짯al of data to trans짯form busi짯ness and socie짯ty for the bet짯ter. To learn more about Intel셲 inno짯va짯tions, go to newsroom.intel.com and intel.com.

짤 Intel Cor짯po짯ra짯ti짯on. Intel, the Intel logo, and other Intel marks are trade짯marks of Intel Cor짯po짯ra짯ti짯on or its sub짯si짯dia짯ries. Other names and brands may be clai짯med as the pro짯per짯ty of others.

Cont짯acts: Broo짯ke Wells Ste짯pha짯nie Matthew
  Inves짯tor Relations Media Rela짯ti짯ons
  503613-8230 669342-8736
  brooke.wells@intel.com stephanie.l.matthew@intel.com

 

Intel Cor짯po짯ra짯ti짯on

Con짯so짯li짯da짯ted Con짯den짯sed State짯ments of Inco짯me and Other Information

    Three Months Ended   Nine Months Ended
(In Mil짯li짯ons, Except Per Share Amounts; unaudited)   Sep 25, 2021   Sep 26, 2020   Sep 25, 2021   Sep 26, 2020
Net reve짯nue   $ 19,192      $ 18,333      $ 58,496      $ 57,889   
Cost of sales   8,446      8,592      25,690      25,625   
Gross mar짯gin   10,746      9,741      32,806      32,264   
Rese짯arch and development   3,803      3,272      11,141      9,901   
Mar짯ke짯ting, gene짯ral and administrative   1,674      1,435      4,601      4,423   
Res짯truc짯tu짯ring and other charges   42      (25)     2,597      146   
Ope짯ra짯ting expenses   5,519      4,682      18,339      14,470   
Ope짯ra짯ting income   5,227      5,059      14,467      17,794   
Gains (los짯ses) on equi짯ty invest짯ments, net   1,707      56      2,370      212   
Inte짯rest and other, net   (76)     (74)     (328)     (416)  
Inco짯me befo짯re taxes   6,858      5,041      16,509      17,590   
Pro짯vi짯si짯on for taxes   35      765      1,264      2,548   
Net inco짯me   $ 6,823      $ 4,276      $ 15,245      $ 15,042   
                 
Ear짯nings per share봟asic   $ 1.68      $ 1.02      $ 3.76      $ 3.55   
Ear짯nings per share봡iluted   $ 1.67      $ 1.02      $ 3.73      $ 3.52   
                 
Weigh짯ted avera짯ge shares of com짯mon stock outstanding:                
Basic   4,061      4,188      4,055      4,233   
Diluted   4,086      4,211      4,089      4,269   

 

    Three Months Ended
(In Mil짯li짯ons)   Sep 25, 2021   Sep 26, 2020
Ear짯nings per share of com짯mon stock information:        
Weigh짯ted avera짯ge shares of com짯mon stock outstanding봟asic   4,061      4,188   
Dilu짯ti짯ve effect of employee equi짯ty incen짯ti짯ve plans   25      23   
Weigh짯ted avera짯ge shares of com짯mon stock outstanding봡iluted   4,086      4,211   
         
Stock buy짯back:        
Shares repurcha짯sed         166   
Cumu짯la짯ti짯ve shares repurcha짯sed (in billions)   5.8      5.7   
Remai짯ning dol짯lars aut짯ho짯ri짯zed for buy짯back (in billions)   $ 7.2      $ 9.7   
         
Other infor짯ma짯ti짯on:        
Employees (in thousands)   117.2      111.3   
                 

 

 

Intel Cor짯po짯ra짯ti짯on

Con짯so짯li짯da짯ted Con짯den짯sed Balan짯ce Sheets

(In Mil짯li짯ons)   Sep 25, 2021   Dec 26, 2020
Assets   (unau짯di짯ted)    
Cur짯rent assets:        
Cash and cash equivalents   $ 7,870      $ 5,865   
Short-term invest짯ments   4,004      2,292   
Tra짯ding assets   22,761      15,738   
Accounts receiva짯ble   8,400      6,782   
Invent짯ories        
Raw mate짯ri짯als   1,274      908   
Work in process   6,304      5,693   
Finis짯hed goods   2,220      1,826   
    9,798      8,427   
Assets held for sale   6,398      5,400   
Other cur짯rent assets   2,073      2,745   
Total cur짯rent assets   61,304      47,249   
         
Pro짯per짯ty, plant and equip짯ment, net   59,733      56,584   
Equi짯ty investments   6,050      5,152   
Other long-term investments   953      2,192   
Good짯will   26,786      26,971   
Iden짯ti짯fied intan짯gi짯ble assets, net   7,684      9,026   
Other long-term assets   5,452      5,917   
Total assets   $ 167,962      $ 153,091   
         
Lia짯bi짯li짯ties        
Cur짯rent liabilities        
Short-term debt   $ 4,694      $ 2,504   
Accounts paya짯ble   6,792      5,581   
Accrued com짯pen짯sa짯ti짯on and benefits   4,026      3,999   
Other accrued liabilities   14,060      12,670   
Total cur짯rent liabilities   29,572      24,754   
Debt   35,610      33,897   
Con짯tract liabilities   62      1,367   
Inco짯me taxes payable   4,223      4,578   
Defer짯red inco짯me taxes   3,019      3,843   
Other long-term liabilities   5,389      3,614   
Stock짯hol짯ders equity        
Com짯mon stock and capi짯tal in excess of par value, 4,067 issued and out짯stan짯ding (4,062 issued and out짯stan짯ding as of Decem짯ber 26, 2020)   27,592      25,556   
Accu짯mu짯la짯ted other com짯pre짯hen짯si짯ve inco짯me (loss)   (1,147)     (751)  
Retai짯ned earnings   63,642      56,233   
Total stock짯hol짯ders equity   90,087      81,038   
Total lia짯bi짯li짯ties and stock짯hol짯ders equity   $ 167,962      $ 153,091   

 

 

Intel Cor짯po짯ra짯ti짯on

Con짯so짯li짯da짯ted Con짯den짯sed State짯ments of Cash Flows

    Nine Months Ended
(In Mil짯li짯ons; unaudited)   Sep 25, 2021   Sep 26, 2020
         
Cash and cash equi짯va짯lents, begin짯ning of period   $ 5,865      $ 4,194   
Cash flows pro짯vi짯ded by (used for) ope짯ra짯ting activities:        
Net inco짯me   15,245      15,042   
Adjus짯t짯ments to recon짯ci짯le net inco짯me to net cash pro짯vi짯ded by ope짯ra짯ting activities:        
Depre짯cia짯ti짯on   7,357      7,925   
Share-based com짯pen짯sa짯ti짯on   1,587      1,393   
Res짯truc짯tu짯ring and other charges   2,597      146   
Amor짯tiza짯ti짯on of intangibles   1,361      1,311   
(Gains) los짯ses on equi짯ty invest짯ments, net   (1,113)     (105)  
Chan짯ges in assets and liabilities:        
Accounts receiva짯ble   (1,618)     525   
Invent짯ories   (1,212)     (570)  
Accounts paya짯ble   1,095      355   
Accrued com짯pen짯sa짯ti짯on and benefits   (16)     (569)  
Pre짯paid sup짯p짯ly agreements   (1,577)     (91)  
Inco짯me taxes   (570)     493   
Other assets and liabilities   1,058      (361)  
Total adjus짯t짯ments   8,949      10,452   
Net cash pro짯vi짯ded by ope짯ra짯ting activities   24,194      25,494   
Cash flows pro짯vi짯ded by (used for) inves짯t짯ing activities:        
Addi짯ti짯ons to pro짯per짯ty, plant and equipment   (11,579)     (10,392)  
Addi짯ti짯ons to held for sale NAND pro짯per짯ty, plant and equipment   (1,118)        
Purcha짯ses of available-for-sale debt investments   (3,983)     (6,323)  
Matu짯ri짯ties and sales of available-for-sale debt investments   3,457      5,037   
Purcha짯ses of tra짯ding assets   (26,343)     (14,744)  
Matu짯ri짯ties and sales of tra짯ding assets   18,813      11,227   
Other inves짯t짯ing   620      83   
Net cash used for inves짯t짯ing activities   (20,133)     (15,112)  
Cash flows pro짯vi짯ded by (used for) finan짯cing activities:        
Issu짯an짯ce of long-term debt, net of issu짯an짯ce costs   4,974      10,247   
Repay짯ment of debt and debt conversion   (500)     (4,525)  
Pro짯ceeds from sales of com짯mon stock through employee equi짯ty incen짯ti짯ve plans   1,016      897   
Repurcha짯se of com짯mon stock   (2,415)     (12,229)  
Acce짯le짯ra짯ted share repurcha짯se for짯ward agreements         (2,000)  
Pay짯ment of divi짯dends to stockholders   (4,231)     (4,215)  
Other finan짯cing   (900)     605   
Net cash pro짯vi짯ded by (used for) finan짯cing activities   (2,056)     (11,220)  
Net increase (decrease) in cash and cash equivalents   2,005      (838)  
Cash and cash equi짯va짯lents, end of period   $ 7,870      $ 3,356   

 

 

Intel Cor짯po짯ra짯ti짯on

Sup짯ple짯men짯tal Ope짯ra짯ting Seg짯ment Results

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

 

We deri짯ve a sub짯stan짯ti짯al majo짯ri짯ty of our reve짯nue from plat짯form pro짯ducts, which are our prin짯ci짯pal pro짯ducts and con짯side짯red as one pro짯duct class. We offer plat짯form pro짯ducts that incor짯po짯ra짯te various com짯pon짯ents and tech짯no짯lo짯gies, inclu짯ding a micro짯pro짯ces짯sor and chip짯set, a stand-alo짯ne SoC, or a mul짯ti짯chip packa짯ge based on Intel archi짯tec짯tu짯re. Plat짯form pro짯ducts are used in various form fac짯tors across our CCG, DCG, and IOTG ope짯ra짯ting seg짯ments. Our non-plat짯form, or adja짯cent pro짯ducts, can be com짯bi짯ned with plat짯form pro짯ducts to form com짯pre짯hen짯si짯ve plat짯form solu짯ti짯ons to meet cus짯to짯mer needs.

Reve짯nue for our repor짯ta짯ble and non-repor짯ta짯ble ope짯ra짯ting seg짯ments is pri짯ma짯ri짯ly rela짯ted to the fol짯lo짯wing pro짯duct lines:

뼧       CCG includes plat짯forms desi짯gned for end-user form fac짯tors, focu짯sing on hig짯her growth seg짯ments of 2멼n1, thin-and-light, com짯mer짯cial and gam짯ing, and gro짯wing adja짯cen짯ci짯es such as con짯nec짯ti짯vi짯ty and graphics.

뼧       DCG includes workload-opti짯mi짯zed plat짯forms and rela짯ted pro짯ducts desi짯gned for cloud ser짯vice pro짯vi짯ders, enter짯pri짯se and govern짯ment, and com짯mu짯ni짯ca짯ti짯ons ser짯vice pro짯vi짯ders mar짯ket seg짯ments. In 2021, the DCG ope짯ra짯ting seg짯ment includes the results of our Intel짰 Opta짯ne꽓 memo짯ry business.

뼧       IOTG includes high-per짯for짯mance com짯pu짯te solu짯ti짯ons for tar짯ge짯ted ver짯ti짯cals and embedded appli짯ca짯ti짯ons in mar짯ket seg짯ments such as retail, indus짯tri짯al, health짯ca짯re, and vision. 

뼧       Mobi짯leye includes deve짯lo짯p짯ment of com짯pu짯ter visi짯on and machi짯ne lear짯ning-based sens짯ing, data ana짯ly짯sis, loca짯liza짯ti짯on, map짯ping, and dri짯ving poli짯cy tech짯no짯lo짯gy for advan짯ced dri짯ver assis짯tance sys짯tems (ADAS) and auto짯no짯mous driving.

뼧       NSG includes deve짯lo짯p짯ment of sto짯rage solu짯ti짯ons using our inno짯va짯ti짯ve Intel짰 3D NAND tech짯no짯lo짯gy, pri짯ma짯ri짯ly used in SSDs. In 2021, the NSG ope짯ra짯ting seg짯ment no lon짯ger includes the results of our Intel Opta짯ne memo짯ry business.

뼧       PSG includes pro짯gramma짯ble semi짯con짯duc짯tors, pri짯ma짯ri짯ly FPGAs and struc짯tu짯red ASICs, and rela짯ted pro짯ducts for com짯mu짯ni짯ca짯ti짯ons, cloud and enter짯pri짯se, and embedded mar짯ket segments.

We have sales and mar짯ke짯ting, manu짯fac짯tu짯ring, engi짯nee짯ring, finan짯ce, and admi짯nis짯tra짯ti짯on groups. Expen짯ses for the짯se groups are gene짯ral짯ly allo짯ca짯ted to the ope짯ra짯ting segments.

We have an 쏿ll other cate짯go짯ry that includes reve짯nue, expen짯ses, and char짯ges such as:

뼧       results of ope짯ra짯ti짯ons from non-repor짯ta짯ble seg짯ments not other짯wi짯se presented;

뼧       his짯to짯ri짯cal results of ope짯ra짯ti짯ons from dive짯s짯ted businesses;

뼧       results of ope짯ra짯ti짯ons of start-up busi짯nesses that sup짯port our initia짯ti짯ves, inclu짯ding our foundry business;

뼧       amounts included within res짯truc짯tu짯ring and other charges;

뼧       a por짯ti짯on of employee bene짯fits, com짯pen짯sa짯ti짯on, and other expen짯ses not allo짯ca짯ted to the ope짯ra짯ting seg짯ments; and

뼧       acqui짯si짯ti짯on-rela짯ted cos짯ts, inclu짯ding amor짯tiza짯ti짯on and any impair짯ment of acqui짯si짯ti짯on-rela짯ted intan짯gi짯bles and goodwill.

 

Intel Cor짯po짯ra짯ti짯on

Sup짯ple짯men짯tal Plat짯form Reve짯nue Information

    Q3 2021   Q3 2021   YTD 2021
    com짯pared to

Q2 2021

  com짯pared to

Q3 2020

  com짯pared to

YTD 2020

Cli짯ent Com짯pu짯ting Group            
Desk짯top plat짯form volumes   11%   16%   8%
Desk짯top plat짯form avera짯ge sel짯ling prices   2%   4%   (1)%
Note짯book plat짯form volumes   (26)%   (14)%   24%
Note짯book plat짯form avera짯ge sel짯ling prices   20%   10%   (12)%
Adja짯cent revenue   %   (35)%   (29)%
             
Data Cen짯ter Group            
Plat짯form volumes   6%   8%   (2)%
Plat짯form avera짯ge sel짯ling prices   (5)%   3%   (6)%
Adja짯cent revenue   %   (1)%   %

 

 

 

 

Intel Cor짯po짯ra짯ti짯on

Expl짯ana짯ti짯on of Non-GAAP Measures

In addi짯ti짯on to dis짯clo짯sing finan짯cial results in accordance with U.S. GAAP, this docu짯ment con짯ta짯ins refe짯ren짯ces to the non-GAAP finan짯cial mea짯su짯res below. We belie짯ve the짯se non-GAAP finan짯cial mea짯su짯res pro짯vi짯de inves짯tors with useful sup짯ple짯men짯tal infor짯ma짯ti짯on about our ope짯ra짯ting per짯for짯mance, enable com짯pa짯ri짯son of finan짯cial trends and results bet짯ween peri짯ods whe짯re cer짯tain items may vary inde짯pen짯dent of busi짯ness per짯for짯mance, and allow for grea짯ter trans짯pa짯ren짯cy with respect to key metrics used by manage짯ment in ope짯ra짯ting our busi짯ness and mea짯su짯ring our per짯for짯mance. Cer짯tain of the짯se non-GAAP finan짯cial mea짯su짯res are used in our per짯for짯mance-based RSUs and our annu짯al cash bonus plan.

Our non-GAAP finan짯cial mea짯su짯res reflect adjus짯t짯ments based on one or more of the fol짯lo짯wing items, as well as the rela짯ted inco짯me tax effects whe짯re appli짯ca짯ble. Inco짯me tax effects have been cal짯cu짯la짯ted using an appro짯pria짯te tax rate for each adjus짯t짯ment. The짯se non-GAAP finan짯cial mea짯su짯res should not be con짯side짯red a sub짯sti짯tu짯te for, or supe짯ri짯or to, finan짯cial mea짯su짯res cal짯cu짯la짯ted in accordance with U.S. GAAP, and the finan짯cial results cal짯cu짯la짯ted in accordance with U.S. GAAP and recon짯ci짯lia짯ti짯ons from the짯se results should be careful짯ly evaluated.

Non-GAAP adjus짯t짯ment or measure Defi짯ni짯ti짯on Useful짯ness to manage짯ment and investors
NAND memo짯ry business Our NAND memo짯ry busi짯ness is sub짯ject to a pen짯ding sale to SK hynix, as announ짯ced in Octo짯ber 2020. We exclude the impact of our NAND memo짯ry busi짯ness in cer짯tain non-GAAP mea짯su짯res becau짯se the짯se adjus짯t짯ments reflect how manage짯ment curr짯ent짯ly views the core ope짯ra짯ti짯ons of the com짯pa짯ny. While the sale of the NAND memo짯ry busi짯ness is still pen짯ding and sub짯ject to clo짯sing con짯di짯ti짯ons, manage짯ment does not curr짯ent짯ly view the busi짯ness as part of the company셲 core ope짯ra짯ti짯ons or its long-term stra짯te짯gic direc짯tion. We belie짯ve the짯se adjus짯t짯ments pro짯vi짯de inves짯tors with a useful view, through the eyes of manage짯ment, of the company셲 core busi짯ness model and how manage짯ment curr짯ent짯ly eva짯lua짯tes core ope짯ra짯tio짯nal per짯for짯mance. We belie짯ve they also pro짯vi짯de inves짯tors with an addi짯tio짯nal means to under짯stand the poten짯ti짯al impact of the dives짯ti짯tu짯re over time. In making the짯se adjus짯t짯ments, we have not made any chan짯ges to our methods for mea짯su짯ring and cal짯cu짯la짯ting reve짯nue or other finan짯cial state짯ment amounts.
Acqui짯si짯ti짯on-rela짯ted adjustments Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intan짯gi짯ble assets con짯sists of amor짯tiza짯ti짯on of intan짯gi짯ble assets such as deve짯lo짯ped tech짯no짯lo짯gy, brands, and cus짯to짯mer rela짯ti짯onships acqui짯red in con짯nec짯tion with busi짯ness com짯bi짯na짯ti짯ons. Char짯ges rela짯ted to the amor짯tiza짯ti짯on of the짯se intan짯gi짯bles are recor짯ded within both cost of sales and MG&A in our U.S. GAAP finan짯cial state짯ments. Amor짯tiza짯ti짯on char짯ges are recor짯ded over the esti짯ma짯ted useful life of the rela짯ted acqui짯red intan짯gi짯ble asset, and thus are gene짯ral짯ly recor짯ded over mul짯ti짯ple years. We exclude amor짯tiza짯ti짯on char짯ges for our acqui짯si짯ti짯on-rela짯ted intan짯gi짯ble assets for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se the짯se char짯ges are incon짯sis짯tent in size and are signi짯fi짯cant짯ly impac짯ted by the timing and valua짯ti짯on of our acqui짯si짯ti짯ons. The짯se adjus짯t짯ments faci짯li짯ta짯te a useful eva짯lua짯ti짯on of our cur짯rent ope짯ra짯ting per짯for짯mance and com짯pa짯ri짯son to our past ope짯ra짯ting per짯for짯mance and pro짯vi짯de inves짯tors with addi짯tio짯nal means to eva짯lua짯te cost and expen짯se trends.
Res짯truc짯tu짯ring and other charges Res짯truc짯tu짯ring char짯ges are cos짯ts asso짯cia짯ted with a for짯mal res짯truc짯tu짯ring plan and are pri짯ma짯ri짯ly rela짯ted to employee sever짯ance and bene짯fit arran짯ge짯ments. Other char짯ges include a char짯ge rela짯ted to the VLSI liti짯ga짯ti짯on, good짯will and asset impairm짯ents, pen짯si짯on char짯ges, and cos짯ts asso짯cia짯ted with res짯truc짯tu짯ring activity. We exclude res짯truc짯tu짯ring and other char짯ges, inclu짯ding any adjus짯t짯ments to char짯ges recor짯ded in pri짯or peri짯ods, for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se the짯se cos짯ts do not reflect our core ope짯ra짯ting per짯for짯mance. The짯se adjus짯t짯ments faci짯li짯ta짯te a useful eva짯lua짯ti짯on of our core ope짯ra짯ting per짯for짯mance and com짯pa짯ri짯sons to past ope짯ra짯ting results and pro짯vi짯de inves짯tors with addi짯tio짯nal means to eva짯lua짯te expen짯se trends.
Gains (los짯ses) from divestiture Gains or los짯ses are reco짯gni짯zed at the clo짯se of a divestiture. We exclude gains or los짯ses resul짯ting from dives짯ti짯tures for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se they do not reflect our cur짯rent ope짯ra짯ting per짯for짯mance. The짯se adjus짯t짯ments faci짯li짯ta짯te a useful eva짯lua짯ti짯on of our cur짯rent ope짯ra짯ting per짯for짯mance and com짯pa짯ri짯sons to past ope짯ra짯ting results.
Ongo짯ing mark-to-mar짯ket on mar짯ke짯ta짯ble equi짯ty securities After the initi짯al mark-to-mar짯ket adjus짯t짯ment is recor짯ded upon a secu짯ri짯ty beco짯ming mar짯ke짯ta짯ble, gains and los짯ses are reco짯gni짯zed from ongo짯ing mark-to-mar짯ket adjus짯t짯ments of our mar짯ke짯ta짯ble equi짯ty securities. We exclude the짯se ongo짯ing gains and los짯ses for pur짯po짯ses of cal짯cu짯la짯ting cer짯tain non-GAAP mea짯su짯res becau짯se we do not belie짯ve this vola짯ti짯li짯ty cor짯re짯la짯tes to our core ope짯ra짯tio짯nal per짯for짯mance. The짯se adjus짯t짯ments faci짯li짯ta짯te a useful eva짯lua짯ti짯on of our cur짯rent ope짯ra짯ting per짯for짯mance and com짯pa짯ri짯sons to past ope짯ra짯ting results.
Free cash flow We refe짯rence a non-GAAP finan짯cial mea짯su짯re of free cash flow, which is used by manage짯ment when asses짯sing our sources of liqui짯di짯ty, capi짯tal resour짯ces, and qua짯li짯ty of ear짯nings. Free cash flow is ope짯ra짯ting cash flow adjus짯ted to exclude addi짯ti짯ons to pro짯per짯ty, plant and equipment. This non-GAAP finan짯cial mea짯su짯re is hel짯pful in under짯stan짯ding our capi짯tal requi짯re짯ments and pro짯vi짯des an addi짯tio짯nal means to eva짯lua짯te the cash flow trends of our busi짯ness. In cal짯cu짯la짯ting free cash flow, we do not sub짯tract addi짯ti짯ons to held for sale NAND pro짯per짯ty, plant and equip짯ment becau짯se the addi짯ti짯ons are not repre짯sen짯ta짯ti짯ve of our long-term capi짯tal requi짯re짯ments and we expect the짯se assets to be sold.

 

Intel Cor짯po짯ra짯ti짯on

Sup짯ple짯men짯tal Recon짯ci짯lia짯ti짯ons of GAAP Actu짯als to Non-GAAP Actuals

Set forth below are recon짯ci짯lia짯ti짯ons of the non-GAAP finan짯cial mea짯su짯re to the most direct짯ly com짯pa짯ra짯ble U.S. GAAP finan짯cial mea짯su짯re. The짯se non-GAAP finan짯cial mea짯su짯res should not be con짯side짯red a sub짯sti짯tu짯te for, or supe짯ri짯or to, finan짯cial mea짯su짯res cal짯cu짯la짯ted in accordance with U.S. GAAP, and the recon짯ci짯lia짯ti짯ons from U.S. GAAP to Non-GAAP actu짯als should be careful짯ly eva짯lua짯ted. Plea짯se refer to 쏣xpl짯ana짯ti짯on of Non-GAAP Mea짯su짯res in this docu짯ment for a detail짯ed expl짯ana짯ti짯on of the adjus짯t짯ments made to the com짯pa짯ra짯ble U.S. GAAP mea짯su짯res, the ways manage짯ment uses the non-GAAP mea짯su짯res, and the reasons why manage짯ment belie짯ves the non-GAAP mea짯su짯res pro짯vi짯de useful infor짯ma짯ti짯on for investors.

    Three Months Ended
(In Mil짯li짯ons, Except Per Share Amounts)   Sep 25, 2021   Sep 26, 2020
GAAP net revenue   $ 19,192      $ 18,333   
NAND memo짯ry business   (1,105)     (1,067)  
Non-GAAP net revenue   $ 18,087      $ 17,266   
         
GAAP gross margin   $ 10,746      $ 9,741   
Acqui짯si짯ti짯on-rela짯ted adjustments   322      310   
NAND memo짯ry business   (616)     (303)  
Non-GAAP gross margin   $ 10,452      $ 9,748   
         
GAAP gross mar짯gin percentage   56.0  %   53.1  %
Acqui짯si짯ti짯on-rela짯ted adjustments   1.7  %   1.7  %
NAND memo짯ry business   0.1  %   1.6  %
Non-GAAP gross mar짯gin per짯cen짯ta짯ge1   57.8  %   56.5  %
         
GAAP R&D and MG&A   $ 5,477      $ 4,707   
Acqui짯si짯ti짯on-rela짯ted adjustments   (53)     (52)  
NAND memo짯ry business   (174)     (158)  
Non-GAAP R&D and MG&A   $ 5,250      $ 4,497   
         
GAAP ope짯ra짯ting income   $ 5,227      $ 5,059   
Acqui짯si짯ti짯on-rela짯ted adjustments   375      362   
Res짯truc짯tu짯ring and other charges   42      (25)  
NAND memo짯ry business   (442)     (145)  
Non-GAAP ope짯ra짯ting income   $ 5,202      $ 5,251   
         
GAAP ope짯ra짯ting margin   27.2  %   27.6  %
Acqui짯si짯ti짯on-rela짯ted adjustments   2.0  %   2.0  %
Res짯truc짯tu짯ring and other charges   0.2  %   (0.1) %
NAND memo짯ry business   (0.6) %   0.9  %
Non-GAAP ope짯ra짯ting mar짯gin1   28.8  %   30.4  %
         
GAAP tax rate   0.5  %   15.2  %
Inco짯me tax effects   (0.1) %   0.2  %
Non-GAAP tax rate   0.4  %   15.4  %
         
GAAP net income   $ 6,823      $ 4,276   
Acqui짯si짯ti짯on-rela짯ted adjustments   375      362   
Res짯truc짯tu짯ring and other charges   42      (25)  
(Gains) los짯ses from divestiture         (6)  
Ongo짯ing mark-to-mar짯ket on mar짯ke짯ta짯ble equi짯ty securities   192      146   
NAND memo짯ry business   (442)     (145)  
Inco짯me tax effects       (62)  
Non-GAAP net income   $ 6,997      $ 4,546   
1  Our recon짯ci짯lia짯ti짯ons of GAAP to non-GAAP gross mar짯gin and ope짯ra짯ting mar짯gin per짯cen짯ta짯ge reflect the exclu짯si짯on of our NAND memo짯ry               busi짯ness from net revenue.
(In Mil짯li짯ons, Except Per Share Amounts)   Sep 25, 2021   Sep 26, 2020
GAAP ear짯nings per share봡iluted   $ 1.67      $ 1.02   
Acqui짯si짯ti짯on-rela짯ted adjustments   0.09      0.09   
Res짯truc짯tu짯ring and other charges   0.01      (0.01)  
(Gains) los짯ses from divestiture            
Ongo짯ing mark-to-mar짯ket on mar짯ke짯ta짯ble equi짯ty securities   0.04      0.03   
NAND memo짯ry business   (0.10)     (0.04)  
Inco짯me tax effects         (0.01)  
Non-GAAP ear짯nings per share봡iluted   $ 1.71      $ 1.08   

 

    Three Months Ended
(In Mil짯li짯ons)   Sep 25, 2021
GAAP cash from operations   $ 9,900   
Addi짯ti짯ons to pro짯per짯ty, plant and equipment   (4,006)  
Free cash flow   $ 5,894   
GAAP cash used for inves짯t짯ing activities   $ (10,682)  
GAAP cash pro짯vi짯ded by (used for) finan짯cing activities   $ 3,906   

 

 

Intel Cor짯po짯ra짯ti짯on

Sup짯ple짯men짯tal Recon짯ci짯lia짯ti짯ons of GAAP Out짯look to Non-GAAP Outlook

Set forth below are recon짯ci짯lia짯ti짯ons of the non-GAAP finan짯cial mea짯su짯re to the most direct짯ly com짯pa짯ra짯ble U.S. GAAP finan짯cial mea짯su짯re. The짯se non-GAAP finan짯cial mea짯su짯res should not be con짯side짯red a sub짯sti짯tu짯te for, or supe짯ri짯or to, finan짯cial mea짯su짯res cal짯cu짯la짯ted in accordance with U.S. GAAP, and the finan짯cial out짯look pre짯pared in accordance with U.S. GAAP and the recon짯ci짯lia짯ti짯ons from this Busi짯ness Out짯look should be careful짯ly evaluated.

Plea짯se refer to 쏣xpl짯ana짯ti짯on of Non-GAAP Mea짯su짯res in this docu짯ment for a detail짯ed expl짯ana짯ti짯on of the adjus짯t짯ments made to the com짯pa짯ra짯ble U.S. GAAP mea짯su짯res, the ways manage짯ment uses the non-GAAP mea짯su짯res, and the reasons why manage짯ment belie짯ves the non-GAAP mea짯su짯res pro짯vi짯de useful infor짯ma짯ti짯on for investors.

(In Bil짯li짯ons, Except Per Share Amounts)   Q4 2021 Outlook   Full-Year 2021
    Appro짯xi짯m짯ate짯ly   Appro짯xi짯m짯ate짯ly
GAAP net revenue   $ 19.2      $ 77.7   
NAND memo짯ry business   (0.9)     (4.2)  
Non-GAAP net revenue   $ 18.3      $ 73.5   
         
GAAP gross margin   51.4  %   54.9  %
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intan짯gi짯ble assets   1.7  %   1.6  %
NAND memo짯ry business   0.3  %   0.7  %
Non-GAAP gross mar짯gin1   53.5  %   57.2  %
         
GAAP tax rate   37  %   15  %
Inco짯me tax effects   (24) %   (6) %
Non-GAAP tax rate   13  %   %
         
GAAP ear짯nings per share봡iluted   $ 0.78      $ 4.50   
Acqui짯si짯ti짯on-rela짯ted adjustments   0.09      0.36   
Res짯truc짯tu짯ring and other charges         0.64   
(Gains) los짯ses from divestiture   (0.24)     (0.24)  
Ongo짯ing mark-to-mar짯ket on mar짯ke짯ta짯ble equi짯ty securities         0.08   
NAND memo짯ry business   (0.06)     (0.32)  
Inco짯me tax effects   0.33      0.26   
Non-GAAP ear짯nings per share봡iluted   $ 0.90      $ 5.28   

1    Our recon짯ci짯lia짯ti짯on of GAAP Out짯look to non-GAAP Out짯look gross mar짯gin per짯cen짯ta짯ge reflects the exclu짯si짯on of our NAND memo짯ry busi짯ness from net revenue.

 

(In Bil짯li짯ons)   Full-Year 2021
GAAP cash from operations   $ 31.0   
Addi짯ti짯ons to pro짯per짯ty, plant and equipment   $ 18.5   
Free cash flow   $ 12.5   

 

Released Oct 21, 2021 4:00 PM EDT