10-KPeriod: FY2011

INTEL CORP Annual Report, Year Ended Dec 31, 2011

Filed February 23, 2012For Securities:INTC

Summary

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.

Financial Statements
Beta
Revenue$54.00B
Cost of Revenue$20.24B
Gross Profit$33.76B
R&D Expenses$8.35B
SG&A Expenses$7.67B
Operating Expenses$16.28B
Operating Income$17.48B
Interest Expense$41.00M
Net Income$12.94B
EPS (Basic)$2.46
EPS (Diluted)$2.39
Shares Outstanding (Basic)5.26B
Shares Outstanding (Diluted)5.41B

Key Highlights

  • 1Record revenue of $54.0 billion in 2011, a 24% increase year-over-year, driven by strong performance in client and data center segments.
  • 2Completed 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.
  • 3Increased R&D spending by 27% to $8.35 billion in 2011 to drive innovation in areas like Ultrabook systems, data centers, and mobile technologies.
  • 4Announced plans for significant capital spending increases to $12.5 billion in 2012, primarily for building advanced 14nm manufacturing facilities.
  • 5Returned $14.1 billion to shareholders through common stock repurchases and $4.1 billion through dividends in 2011.
  • 6Successfully transitioned to 22nm process technology, with initial manufacturing starting in the second half of 2011, and is developing 14nm process technology for 2013.
  • 7PC Client Group revenue increased 17% year-over-year, while Data Center Group revenue grew 17%, highlighting broad-based growth across key segments.

Frequently Asked Questions

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.

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.

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.

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.