01—Abstract
Summary
Summary of the 10-K filed February 23, 2012. Cited figures are marked; the original filing is the authoritative source.
Intel Corporation's 2011 10-K filing reveals a strong year of growth, with record revenue, operating income, and net income, driven by robust performance in both its client and data center businesses.
The company's strategic focus on energy-efficient performance, connectivity, and security is evident through significant investments, including the notable acquisitions of McAfee and Infineon's Wireless Solutions business. These strategic moves are designed to position Intel for success in evolving computing markets beyond traditional PCs, such as smartphones, tablets, and the connected economy. Intel is making substantial investments in its future, particularly in advanced manufacturing processes like 22nm and 14nm technologies, aiming to maintain its leadership in silicon technology.
This is supported by a significant increase in R&D spending. The company also demonstrated a strong commitment to shareholder returns, evidenced by substantial common stock repurchases and consistent dividend payments. Despite facing a competitive landscape and industry shifts, Intel's proactive strategy and continued innovation indicate a forward-looking approach to capitalize on emerging technology trends.
02—Key points
Key Highlights
- Record revenue of $54.0 billion in 2011, a 24% increase year-over-year, driven by strong performance in client and data center segments.
- Completed significant strategic acquisitions of McAfee for $6.7 billion and Infineon's Wireless Solutions business for $1.4 billion to expand product offerings and market reach.
- Increased R&D spending by 27% to $8.35 billion in 2011 to drive innovation in areas like Ultrabook systems, data centers, and mobile technologies.
- Announced plans for significant capital spending increases to $12.5 billion in 2012, primarily for building advanced 14nm manufacturing facilities.
- Returned $14.1 billion to shareholders through common stock repurchases and $4.1 billion through dividends in 2011.
- Successfully transitioned to 22nm process technology, with initial manufacturing starting in the second half of 2011, and is developing 14nm process technology for 2013.
- PC Client Group revenue increased 17% year-over-year, while Data Center Group revenue grew 17%, highlighting broad-based growth across key segments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Intel Corp kept $0.24.
- Revenue$54.00B100.0%
- Cost of revenue−$20.24B37.5%
- Gross profit$33.76B62.5%
- Operating costs−$16.28B30.1%
- Operating income$17.48B32.4%
- Interest, other & tax−$4.54B8.4%
- Net income$12.94B24.0%
Where FY2011 revenue went
$54.00B- Cost of revenue: $20.24B, 37% of revenue
- Net income: $12.94B, 24% of revenue
- R&D: $8.35B, 15% of revenue
- SG&A: $7.67B, 14% of revenue
- Interest, other & tax: $4.54B, 8.4% of revenue
Kept 24% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 23, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $54.00B$43.62B | +23.8% |
| Cost of Revenue | $20.24B$15.13B | +33.8% |
| Gross Profit | $33.76B$28.49B | +18.5% |
| R&D Expenses | $8.35B$6.58B | +27.0% |
| SG&A Expenses | $7.67B$6.31B | +21.6% |
| Operating Expenses | $16.28B$12.90B | +26.2% |
| Operating Income | $17.48B$15.59B | +12.1% |
| Interest Expense | $41.00M$0 | — |
| Net Income | $12.94B$11.46B | +12.9% |
| EPS (Basic) | $2.46$2.06 | +19.4% |
| EPS (Diluted) | $2.39$2.01 | +18.9% |
| Shares Outstanding (Basic) | 5.26B5.55B | −5.4% |
| Shares Outstanding (Diluted) | 5.41B5.70B | −5.0% |
05—Questions
Frequently Asked Questions
What were Intel's key strategic acquisitions in 2011 and their impact?
In 2011, Intel made two significant acquisitions: McAfee, Inc. for $6.7 billion and Infineon Technologies AG's Wireless Solutions (WLS) business for $1.4 billion. These acquisitions were strategic to enhance Intel's security solutions (with McAfee) and expand its wireless connectivity portfolio (with WLS), aiming to strengthen its presence in emerging markets like smartphones and tablets.
How is Intel investing in future growth and technology?
Intel is heavily investing in its future by increasing R&D spending to $8.35 billion in 2011, focusing on key areas such as energy-efficient performance, connectivity, and security. Additionally, capital spending is set to increase to $12.5 billion in 2012 to build out advanced 14nm manufacturing capabilities, underscoring a commitment to maintaining its leadership in silicon process technology.
What is Intel's financial performance in 2011 compared to previous years?
Intel reported a record year in 2011 with revenue reaching $54.0 billion, a 24% increase from 2010's $43.6 billion and a 64% increase from 2009's $35.1 billion. Net income also saw significant growth, reaching $12.9 billion in 2011, up from $11.5 billion in 2010 and $4.4 billion in 2009. This strong performance reflects successful execution of its strategy and market demand.
How is Intel addressing the competitive landscape and evolving market?
Intel is strategically expanding its platforms beyond PCs and servers into adjacent market segments like smartphones, tablets, and embedded systems. The company is focusing on delivering solutions that offer energy-efficient performance, enhanced connectivity, and robust security features. Acquisitions and increased R&D spending are key components of this strategy to compete effectively against established players in these new markets.
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