Intel Corporation

Recent Highlight

Recent Highlights

Revenue $10.8 billion
Gross Margin 67 percent
Operating Income $4.0 billion
Net Income $2.9 billion
EPS 51 cents

SANTA CLARA, Calif., July 13, 2010 - Intel Corporation today reported second-quarter revenue of $10.8 billion, up 34 percent year-over-year. The company reported operating income of $4.0 billion, net income of $2.9 billion and EPS of 51 cents.

"Strong demand from corporate customers for our most advanced microprocessors helped Intel achieve the best quarter in the company's 42-year history," said Paul Otellini, Intel president and CEO. "Our process technology lead plus compelling architectural designs increasingly differentiate Intel-based products in the marketplace. The PC and server segments are healthy and the demand for leading-edge technology will continue to increase for the foreseeable future."

GAAP Financial Comparison
	Q2 2010	vs. Q1 2010	vs. Q2 2009
Revenue	$10.8 billion	up $466 million	up $2.7 billion
Operating Income	$4.0 billion	up $533 million	up $4.0 billion
Net Income	$2.9 billion	up $445 million	up $3.3 billion
Earnings Per Share	51 cents	up 8 cents	up 58 cents

Non-GAAP Financial Comparison Excluding Q2 2009 European Commission Fine of $1.45 Billion
	Q2 2010	vs. Q2 2009
Revenue	$10.8 billion	up $2.7 billion	up 34%
Operating Income	$4.0 billion	up $2.5 billion	up 177%
Net Income	$2.9 billion	up $1.8 billion	up 175%
Earnings Per Share	51 cents	up 33 cents	up 183%

Q2 2010 Highlights

PC Client Group revenue was up 2 percent sequentially, with record mobile microprocessor revenue.
Data Center Group revenue was up 13 percent sequentially, with record server microprocessor revenue.
Intel® Atom™ microprocessor and chipset revenue of $413 million, up 16 percent sequentially.
The average selling price (ASP) for microprocessors was slightly up sequentially.
Gross margin was 67 percent, 3 percentage points higher than the midpoint of the company's expected range of 62 to 66 percent.
R&D plus MG&A spending was $3.25 billion, higher than the company's prior expectation of approximately $3.1 billion.
The net gain from equity investments interest and other was $204 million, higher than the company's revised expectation of $180 million.
The effective tax rate was 31 percent, slightly below the company's revised expectation of approximately 32 percent.

INTEL CORPORATION
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS

In addition to disclosing financial results calculated in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non-GAAP financial measures that exclude the charge incurred in the second quarter of 2009 as a result of the European Commission (EC) fine in the amount of €1.06 billion, or about $1.45 billion.

The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show the reader, how our performance compares to other periods. Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

		(In millions, except per-share amounts)
	Three Months Ended						Six Months Ended
	June 26,		June 27,				June 26,		June 27,
	2010		2009				2010		2009

GAAP OPERATING INCOME (LOSS)	$	3,981	$	(12	)		$	7,429	$	635
Adjustment for EC fine		-		1,447				-		1,447
OPERATING INCOME EXCLUDING EC FINE	$	3,981	$	1,435			$	7,429	$	2,082

GAAP NET INCOME (LOSS)	$	2,887	$	(398	)		$	5,329	$	231
Adjustment for EC fine		-		1,447				-		1,447
NET INCOME EXCLUDING EC FINE	$	2,887	$	1,049			$	5,329	$	1,678

GAAP DILUTED EARNINGS (LOSS) PER COMMON SHARE	$	0.51	$	(0.07	)		$	0.94	$	0.04
Adjustment for EC fine		-		0.25				-		0.26
DILUTED EARNINGS PER COMMON SHARE EXCLUDING EC FINE	$	0.51	$	0.18		⁽¹⁾	$	0.94	$	0.30

(1) Calculated based on common shares of 5,678 for three months ended June 27, 2009, which is the number of common shares that would have been used in the calculation of diluted earnings per common share if the Company had GAAP net income.