01—Abstract
Summary
Summary of the 10-K filed February 12, 2016. Cited figures are marked; the original filing is the authoritative source.
Intel Corporation's 2015 10-K filing highlights a year of strategic maneuvering and technological advancement as the company navigates the evolving computing landscape.
Despite a slight dip in overall net revenue to $55.4 billiona from $55.9 billion in 2014, Intel demonstrated resilience, particularly in its Data Center Group (DCG), which saw an 11% revenue increase, driven by cloud computing growth. The company is actively investing in future growth areas such as the Internet of Things (IoT) and memory solutions, aligning with its "Virtuous Cycle of Growth" strategy. A significant development is the impending acquisition of Altera Corporation, a move that Intel expects will enhance its offerings in the data center and IoT segments by integrating Altera's field-programmable gate array (FPGA) technology with Intel's silicon and manufacturing leadership.
The company also continued its aggressive investment in research and development, totaling $12.1 billionb, to maintain its process technology leadership and drive innovation across its product portfolio, including advancements in 14nm and the development of 10nm process technologies. While the Client Computing Group (CCG) experienced an 8% revenue decline due to a softening PC market and a strong comparison period from 2014's Windows XP refresh, Intel is focusing on newer form factors and improved energy efficiency to revitalize this segment. The company also returned significant capital to shareholders through dividends and share repurchases, underscoring its commitment to shareholder value.
02—Key points
Key Highlights
- Net revenue for 2015 was $55.355 billion, a slight decrease of 1% from $55.870 billion in 2014.
- Data Center Group (DCG) revenue grew 11% to $15.977 billion, driven by strong performance in cloud computing.
- Client Computing Group (CCG) revenue declined 8% to $32.219 billion, impacted by PC market weakness and the prior year's Windows XP refresh cycle.
- Research and Development (R&D) spending increased 5% to $12.128 billion, reflecting continued investment in process technology (14nm and 10nm) and new product development.
- Intel completed the acquisition of Altera Corporation, aimed at strengthening its position in the data center and Internet of Things (IoT) markets through the integration of FPGA technology.
- The company returned $7.557 billion to stockholders in 2015 through $4.556 billion in dividends and $3.001 billion in common stock repurchases.
- Intel's effective tax rate decreased to 19.6% in 2015, down from 25.9% in 2014, largely due to one-time items and the reinvestment of certain non-U.S. earnings.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Intel Corp kept $0.21.
- Revenue$55.35B100.0%
- Cost of revenue−$20.68B37.4%
- Gross profit$34.68B62.6%
- Operating costs−$20.68B37.4%
- Operating income$14.00B25.3%
- Interest, other & tax−$2.58B4.7%
- Net income$11.42B20.6%
Where FY2015 revenue went
$55.35B- Cost of revenue: $20.68B, 37% of revenue
- R&D: $12.13B, 22% of revenue
- Net income: $11.42B, 21% of revenue
- SG&A: $7.93B, 14% of revenue
- Other operating costs: $619.0M, 1.1% of revenue
- Interest, other & tax: $2.58B, 4.7% of revenue
Kept 21% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 12, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $55.35B$55.87B | −0.9% |
| Cost of Revenue | $20.68B$20.26B | +2.0% |
| Gross Profit | $34.68B$35.61B | −2.6% |
| R&D Expenses | $12.13B$11.54B | +5.1% |
| SG&A Expenses | $7.93B$8.14B | −2.5% |
| Operating Expenses | $20.68B$20.26B | +2.0% |
| Operating Income | $14.00B$15.35B | −8.8% |
| Interest Expense | $337.00M$192.00M | +75.5% |
| Net Income | $11.42B$11.70B | −2.4% |
| EPS (Basic) | $2.41$2.39 | +0.8% |
| EPS (Diluted) | $2.33$2.31 | +0.9% |
| Shares Outstanding (Basic) | 4.74B4.90B | −3.2% |
| Shares Outstanding (Diluted) | 4.89B5.06B | −3.2% |
05—Questions
Frequently Asked Questions
What were Intel's main revenue drivers and challenges in 2015?
Intel's Data Center Group (DCG) was a key revenue driver, showing an 11% increase due to growth in cloud computing. However, the Client Computing Group (CCG) faced challenges, with an 8% revenue decline attributed to a weaker PC market and the tail end of the Windows XP refresh cycle from the prior year.
What is the strategic importance of the Altera acquisition?
The acquisition of Altera Corporation, completed at the end of 2015, is strategically important for Intel as it integrates Altera's leading field-programmable gate array (FPGA) technology with Intel's advanced products and manufacturing capabilities. This combination is expected to enable new platform solutions that cater to the growing demands of the data center and Internet of Things (IoT) market segments.
How did Intel's investment in R&D change, and what were its focus areas?
Intel increased its R&D spending by 5% to $12.1 billion in 2015. The company's R&D efforts were focused on maintaining its process technology leadership, including advancements in 14nm technology and the development of 10nm technology, as well as driving innovation in server, IoT, and new device product lines.
What actions did Intel take regarding capital return to shareholders in 2015?
In 2015, Intel returned approximately $7.6 billion to shareholders. This included $4.6 billion in dividends paid to stockholders and $3.0 billion in share repurchases under its stock repurchase program.
06—Continue