8-KEarnings & Results

INTEL CORP 8-K Report, Financial Results (Jan 15, 2010)

Filed January 15, 2010For Securities:INTC

Summary

Intel Corporation's (INTC) 8-K filing on January 15, 2010, primarily reports on its financial results for the fourth quarter and full year ended December 26, 2009. The company is providing both GAAP and non-GAAP financial measures to offer investors a clearer view of operational performance, particularly by excluding significant one-time charges incurred in prior periods. These exclusions include a $1.25 billion settlement with AMD, a €1.06 billion ($1.45 billion) fine from the European Commission, and a $938 million impairment charge related to its Clearwire investment. Management utilizes these non-GAAP figures to better assess and present the underlying business trends, as these charges substantially impacted net income and earnings per share in the comparative periods, potentially obfuscating core operational performance. Investors should note the material impact of these charges on reported GAAP figures, especially for Q4 2009 and the full year 2009, when comparing them to prior periods. The non-GAAP results, which exclude these specific items, show a more robust operational picture, with higher non-GAAP net income and earnings per share for Q4 2009 and the full year 2009 compared to the respective GAAP figures. The company emphasizes that these non-GAAP measures are intended to supplement, not replace, GAAP reporting and encourages investors to review both to fully understand the financial implications of these charges.

Key Highlights

  • 1Intel provided Q4 and full-year 2009 financial results, alongside forward-looking statements for 2010 and Q1 2010.
  • 2The report details significant one-time charges impacting GAAP results: a $1.25 billion settlement with AMD (Q4 2009), a €1.06 billion ($1.45 billion) European Commission fine (Q2 2009), and a $938 million Clearwire investment impairment (Q4 2008).
  • 3Intel is presenting non-GAAP financial measures, excluding these significant charges, to offer a clearer view of operational performance and comparability.
  • 4Non-GAAP Q4 2009 operating income was $3.75 billion, compared to $2.50 billion GAAP.
  • 5Non-GAAP Q4 2009 net income was $3.09 billion, significantly higher than the GAAP net income of $2.28 billion.
  • 6Non-GAAP Q4 2009 EPS was $0.55, compared to GAAP EPS of $0.40.
  • 7The company explicitly states that non-GAAP measures should not be considered a substitute for GAAP measures but are used by management to assess business trends and aid period-to-period comparisons.

Frequently Asked Questions

Intel is presenting non-GAAP financial measures to provide investors with a clearer perspective on the company's operational performance by excluding significant one-time charges that materially impacted their GAAP results. These charges include a substantial settlement with AMD, a fine from the European Commission, and an impairment loss on an investment. Management believes these exclusions help in assessing underlying business trends and comparability across periods.

The excluded charges were substantial. They include a $1.25 billion settlement with AMD in Q4 2009, a €1.06 billion (approximately $1.45 billion) fine from the European Commission in Q2 2009, and a $938 million impairment of investments in Clearwire Corp. in Q4 2008. These items significantly affected GAAP net income and earnings per share.

For Q4 2009, the non-GAAP adjustments resulted in higher reported figures compared to GAAP. Non-GAAP operating income was $3.75 billion versus $2.50 billion GAAP. Non-GAAP net income was $3.09 billion compared to $2.28 billion GAAP. Similarly, non-GAAP EPS was $0.55, while GAAP EPS was $0.40. These differences highlight the impact of the AMD settlement charge on the GAAP figures.

No, Intel explicitly states that its non-GAAP financial measures should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP. The company encourages investors to carefully evaluate both GAAP and non-GAAP results, as well as the reconciliations provided, to gain a complete understanding of the company's financial performance and the impact of the excluded charges.