01—Abstract
Summary
Summary of the 10-K filed February 22, 2010. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- Revenue for 2009 was $35.1 billion, a decrease from $37.6 billion in 2008, reflecting the economic environment and business divestitures.
- The company achieved a record gross margin percentage of 64.7% in Q4 2009, driven by higher average selling prices and unit sales.
- Intel generated $11.2 billion in cash from operations in 2009, demonstrating strong cash flow generation despite significant one-time expenses.
- A major legal settlement with AMD was completed in Q4 2009 for $1.25 billion, resolving all outstanding litigation.
- The company continued to advance its manufacturing technology, with a strong ramp of its 32nm process technology and new microprocessor products.
- Intel announced plans to increase capital spending in 2010, reflecting confidence in future growth and continued investment in manufacturing capabilities.
- Despite a challenging year, Intel returned $3.1 billion to stockholders through dividends and repurchased $1.8 billion of its common stock.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Intel Corp kept $0.12.
- Revenue$35.13B100.0%
- Cost of revenue−$15.57B44.3%
- Gross profit$19.56B55.7%
- Operating costs−$13.85B39.4%
- Operating income$5.71B16.3%
- Interest, other & tax−$1.34B3.8%
- Net income$4.37B12.4%
Where FY2009 revenue went
$35.13B- Cost of revenue: $15.57B, 44% of revenue
- SG&A: $7.93B, 23% of revenue
- R&D: $5.65B, 16% of revenue
- Net income: $4.37B, 12% of revenue
- Other operating costs: $266.0M, 0.8% of revenue
- Interest, other & tax: $1.34B, 3.8% of revenue
Kept 12% as net incomeNet income $4.37B · 12%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 22, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $35.13B$37.59B | −6.5% |
| Cost of Revenue | $15.57B$16.74B | −7.0% |
| Gross Profit | $19.56B$20.84B | −6.2% |
| R&D Expenses | $5.65B$5.72B | −1.2% |
| SG&A Expenses | $7.93B$5.45B | +45.5% |
| Operating Expenses | $13.85B$11.89B | +16.5% |
| Operating Income | $5.71B$8.95B | −36.2% |
| Interest Expense | $1.00M$8.00M | −87.5% |
| Net Income | $4.37B$5.29B | −17.4% |
| EPS (Basic) | $0.79$0.93 | −15.1% |
| EPS (Diluted) | $0.77$0.92 | −16.3% |
| Shares Outstanding (Basic) | 5.56B5.66B | −1.9% |
| Shares Outstanding (Diluted) | 5.64B5.75B | −1.8% |
05—Questions
Frequently Asked Questions
What was Intel's financial performance in 2009 compared to 2008?
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.
What were the key product developments or strategic shifts mentioned in the filing?
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.
What were the significant legal matters or settlements impacting Intel in 2009?
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.
How did Intel manage its capital and return value to shareholders?
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.
06—Continue