10-KPeriod: FY2009

INTEL CORP Annual Report, Year Ended Dec 26, 2009

Filed February 22, 2010For Securities:INTC

Summary

Intel Corporation's 2009 10-K filing reveals a company navigating the aftermath of a significant economic downturn, showing resilience and strategic adjustments. Despite a year-over-year revenue decrease, the company demonstrated strong sequential growth in the fourth quarter, driven by demand in the PC client market and successful product ramps, particularly with its 32nm process technology. Intel's focus on product innovation, energy efficiency, and platform integration remains central to its strategy. The company is investing heavily in R&D to maintain its technology leadership and is strategically positioned to capitalize on growth areas like mobile computing and the digital home. Financial highlights include a record-setting gross margin percentage in Q4 2009 and a substantial generation of operating cash flow, even after significant legal settlement payments. The company's commitment to returning capital to shareholders through dividends and share repurchases underscores its financial strength.

Financial Highlights

54 data points
Beta

Revenue

$35.13B

55.7% Gross Margin

Net Income

$4.37B

12.4% Net Margin

EPS (Diluted)

$0.77

Total Assets

$53.09B

Cash & Equivalents

$3.99B

Free Cash Flow

$6.66B

Financial Statements
Beta
Revenue$35.13B
Cost of Revenue$15.57B
Gross Profit$19.56B
R&D Expenses$5.65B
SG&A Expenses$7.93B
Operating Expenses$13.85B
Operating Income$5.71B
Interest Expense$1.00M
Net Income$4.37B
EPS (Basic)$0.79
EPS (Diluted)$0.77
Shares Outstanding (Basic)5.56B
Shares Outstanding (Diluted)5.64B

Key Highlights

  • 1Revenue for 2009 was $35.1 billion, a decrease from $37.6 billion in 2008, reflecting the economic environment and business divestitures.
  • 2The company achieved a record gross margin percentage of 64.7% in Q4 2009, driven by higher average selling prices and unit sales.
  • 3Intel generated $11.2 billion in cash from operations in 2009, demonstrating strong cash flow generation despite significant one-time expenses.
  • 4A major legal settlement with AMD was completed in Q4 2009 for $1.25 billion, resolving all outstanding litigation.
  • 5The company continued to advance its manufacturing technology, with a strong ramp of its 32nm process technology and new microprocessor products.
  • 6Intel announced plans to increase capital spending in 2010, reflecting confidence in future growth and continued investment in manufacturing capabilities.
  • 7Despite a challenging year, Intel returned $3.1 billion to stockholders through dividends and repurchased $1.8 billion of its common stock.

Frequently Asked Questions

In 2009, Intel's net revenue was $35.1 billion, a decrease of 7% compared to $37.6 billion in 2008. This decline was attributed to lower average selling prices for microprocessors and chipsets, and reduced revenue from divested businesses. However, the company experienced strong sequential revenue growth in the fourth quarter of 2009, up 28% year-over-year.

Intel highlighted the strong ramp of its 32nm process technology and new microprocessor products, including Core i7, i5, and i3 mobile and desktop processors. The company also emphasized its strategy to drive growth in new market segments with Intel Atom processors for handhelds, embedded applications, and consumer electronics. A significant organizational restructuring was completed in late 2009 to better align product groups with core competencies.

Intel settled all outstanding legal disputes with AMD in November 2009 for $1.25 billion. Additionally, the European Commission imposed a fine of €1.06 billion ($1.447 billion) on Intel for alleged antitrust violations, which Intel paid and has appealed. The company was also involved in antitrust investigations by the New York Attorney General and the U.S. Federal Trade Commission.

Intel generated substantial operating cash flow of $11.2 billion in 2009. The company returned $3.1 billion to shareholders through dividends and repurchased $1.8 billion of its common stock. Intel also issued $2.0 billion in convertible debt during the year.