Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report: January 15, 2015

(Date of earliest event reported)

INTEL CORPORATION

(Exact name of registrant as specified in its charter)



Delaware	000-06217	94-1672743
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)


2200 Mission College Blvd., Santa Clara, California		95054-1549
(Address of principal executive offices)		(Zip Code)

(408) 765-8080
(Registrant's telephone number, including area code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))


Item 2.02	RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for Intel Corporation for the quarter ended December 27, 2014 and forward-looking statements relating to the first quarter of 2015 as presented in a press release of January 15, 2015. This Exhibit 99.1, which discloses financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), also includes a reconciliation for non-GAAP financial measures for gross cash, net cash and other longer term investments, which non-GAAP terms were used in Intel’s Q3 2014 earnings conference. The “Supplemental Reconciliations of GAAP to Non-GAAP Results” is included in the tables of Exhibit 99.1 and sets forth how management uses these non-GAAP measures and the reasons why management views these measures as providing useful information for investors. These non-GAAP financial measures 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 Intel’s results should be carefully evaluated.

Attached hereto as Exhibit 99.2 and incorporated by reference herein is financial information and commentary by Stacy J. Smith, Executive Vice President and Chief Financial Officer of Intel Corporation for the quarter and fiscal year ended December 27, 2014 and forward-looking statements relating to 2015 and the first quarter of 2015 as posted on the company’s investor website, intc.com, on January 15, 2015.

The information in this report shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



			INTEL CORPORATION
			(Registrant)

Date:	January 15, 2015	By:	/s/ Cary I. Klafter
			Cary I. Klafter
			Corporate Secretary

Exhibit 99.1

Intel Corporation

2200 Mission College Blvd.

Santa Clara, CA 95054-1549

News Release

Intel Reports Record Full-Year Revenue of $55.9 Billion

Generates Net Income of $11.7 Billion, Up 22 Percent Year-over-Year

Reports Record Fourth-Quarter Revenue of $14.7 Billion

News Highlights:


•	Record full-year revenue and fourth-quarter revenue, with both up 6 percent year-over-year


•	Record full-year unit shipments of PCs, servers, tablets, phones and the Internet of Things; and exceeded the tablet goal by shipping 46 million units


•	Completed $4.0 billion share repurchase in the fourth-quarter, $10.8 billion for the full-year


•	Announced increase in cash dividend to 96 cents-per-share on an annual basis

SANTA CLARA, Calif., January 15, 2015 -- Intel Corporation today reported full-year revenue of $55.9 billion, operating income of $15.3 billion, net income of $11.7 billion and EPS of $2.31. The company

generated approximately $20.4 billion in cash from operations, paid dividends of $4.4 billion, and used

$10.8 billion to repurchase 332 million shares of stock.

For the fourth-quarter, Intel posted revenue of $14.7 billion, operating income of $4.5 billion, net income of $3.7 billion and EPS of $0.74. The company generated approximately $5.8 billion in cash from operations, paid dividends of $1.1 billion and used $4.0 billion to repurchase 115 million shares of stock.

“The fourth quarter was a strong finish to a record year,” said Intel CEO Brian Krzanich. “We met or exceeded several important goals: reinvigorated the PC business, grew the Data Center business, established a footprint in tablets, and drove growth and innovation in new areas. There is more to do in 2015. We’ll improve our profitability in mobile, and keep Intel focused on the next wave of computing.”

Full-Year 2014 Business Unit Trends


•	PC Client Group revenue of $34.7 billion, up 4 percent from 2013.


•	Data Center Group revenue of $14.4 billion, up 18 percent from 2013.


•	Internet of Things Group revenue of $2.1 billion, up 19 percent from 2013.


•	Mobile and Communications Group revenue of $202 million, down 85 percent from 2013.


•	Software and services operating segments revenue of $2.2 billion, up 1 percent from 2013.

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Intel/Page 2

Q4 Key Business Unit Trends


•	PC Client Group revenue of $8.9 billion, down 3 percent sequentially and up 3 percent year-over-year.


•	Data Center Group revenue of $4.1 billion, up 11 percent sequentially and up 25 percent year-over-year.


•	Internet of Things Group revenue of $591 million, up 12 percent sequentially and up 10 percent year-over-year.


•	Mobile and Communications Group negative revenue of $6 million, consistent with expectations.


•	Software and services operating segments revenue of $557 million, flat sequentially and down 6 percent year-over-year.



Financial Comparison
Annual
	2014	2013	vs. 2013
Revenue	$55.9 billion	$52.7 billion	up 6%
Gross Margin	63.7%	59.8%	up 3.9 points
R&D and MG&A	$19.7 billion	$18.7 billion	up 5%
Operating Income	$15.3 billion	$12.3 billion	up 25%
Tax Rate	25.9%	23.7%	up 2.2 points
Net Income	$11.7 billion	$9.6 billion	up 22%
Earnings Per Share	$2.31	$1.89	up 22%



Financial Comparison
Quarterly Year-Over-Year
	Q4 2014	Q4 2013	vs. Q4 2013
Revenue	$14.7 billion	$13.8 billion	up 6%
Gross Margin	65.4%	62.0%	up 3.4 points
R&D and MG&A	$5.0 billion	$4.8 billion	up 4%
Operating Income	$4.5 billion	$3.5 billion	up 25%
Tax Rate	21.4%	26.1%	down 4.7 points
Net Income	$3.7 billion	$2.6 billion	up 39%
Earnings Per Share	74 cents	51 cents	up 45%



Financial Comparison
Quarterly Sequential
	Q4 2014	Q3 2014	vs. Q3 2014
Revenue	$14.7 billion	$14.6 billion	up 1%
Gross Margin	65.4%	65.0%	up 0.4 point
R&D and MG&A	$5.0 billion	$4.8 billion	up 5%
Operating Income	$4.5 billion	$4.5 billion	down 2%
Tax Rate	21.4%	27.1%	down 5.7 points
Net Income	$3.7 billion	$3.3 billion	up 10%
Earnings Per Share	74 cents	66 cents	up 12%

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Intel/Page 3

Business Outlook

Intel’s Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments and other significant transactions that may be completed after January 15.

Full-Year 2015


•	Revenue: growth in the mid-single digit percentage points.


•	Gross margin percentage: 62 percent, plus or minus a couple of percentage points.


•	R&D plus MG&A spending: approximately $20.0 billion, plus or minus $400 million.


•	Amortization of acquisition-related intangibles: approximately $255 million.


•	Depreciation: approximately $8.1 billion, plus or minus $100 million.


•	Tax rate: approximately 27 percent.


•	Full-year capital spending: $10.0 billion, plus or minus $500 million.

Q1 2015


•	Revenue: $13.7 billion, plus or minus $500 million.


•	Gross margin percentage: 60 percent, plus or minus a couple of percentage points.


•	R&D plus MG&A spending: approximately $4.9 billion.


•	Restructuring charges: approximately $40 million.


•	Amortization of acquisition-related intangibles: approximately $65 million.


•	Impact of equity investments and interest and other: approximately zero.


•	Depreciation: approximately $1.8 billion.

For additional information regarding Intel’s results and Business Outlook, please see the CFO commentary at: www.intc.com/results.cfm.

Status of Business Outlook

Intel’s Business Outlook is posted on intc.com and may be reiterated in public or private meetings with investors and others. The Business Outlook will be effective through the close of business on March 13 unless earlier updated; except that the Business Outlook for amortization of acquisition-related intangibles, impact of equity investments and interest and other, restructuring charges, and tax rate, will be effective only through the close of business on January 22. Intel’s Quiet Period will start from the close of business on March 13 until publication of the company’s first-quarter earnings release, scheduled for April 14. During the Quiet Period, all of the Business Outlook and other forward-looking statements disclosed in the company’s news releases and filings with the SEC should be considered as historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.

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Intel/Page 4

Risk Factors

The statements in this document that refer to plans and expectations for the first quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," "should" and their variations identify forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect Intel's actual results, and variances from Intel's current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be important factors that could cause actual results to differ materially from the company's expectations.

•

Demand for Intel’s products is highly variable and could differ from expectations due to factors including changes in the business and economic conditions; consumer confidence or income levels; customer acceptance of Intel’s and competitors’ products; competitive and pricing pressures, including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers.

•

Intel’s gross margin percentage could vary significantly from expectations based on capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels; segment product mix; the timing and execution of the manufacturing ramp and associated costs; excess or obsolete inventory; changes in unit costs; defects or disruptions in the supply of materials or resources; and product manufacturing quality/yields. Variations in gross margin may also be caused by the timing of Intel product introductions and related expenses, including marketing expenses, and Intel’s ability to respond quickly to technological developments and to introduce new features into existing products, which may result in restructuring and asset impairment charges.

•

Intel's results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Results may also be affected by the formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, which could be changed without prior notice.


•	Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in the short term.


•	The amount, timing and execution of Intel’s stock repurchase program and dividend program could be affected by changes in Intel’s priorities for the use of cash, such as operational spending, capital spending, acquisitions, and as a result of changes to Intel’s cash flows and changes in tax laws.

•

Intel’s expected tax rate is based on current tax law and current expected income and may be affected by the jurisdictions in which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various authorities, including payment of interest and penalties; and the ability to realize deferred tax assets.


•	Gains or losses from equity securities and interest and other could vary from expectations depending on gains or losses on the sale, exchange, changes in the fair value or impairments of debt and equity investments, interest rates, cash balances and changes in the fair value of derivative instruments.


•	Product defects or errata (deviations from published specifications) may adversely impact our expenses, revenues and reputation.

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Intel/Page 5

•

Intel’s results could be affected by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust, disclosure and other issues. An unfavorable ruling could include monetary damages or an injunction prohibiting Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel’s ability to design its products, or requiring other remedies such as compulsory licensing of intellectual property.


•	Intel’s results may be affected by the timing of closing of acquisitions, divestitures and other significant transactions.

A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the company’s most recent reports on Form 10-K and Form 10-Q.

Earnings Webcast

Intel will hold a public webcast at 2 p.m. PDT today on its Investor Relations website at www.intc.com. A webcast replay and MP3 download will also be available on the site.

Intel plans to report its earnings for the first quarter of 2015 on April 14. Immediately following the earnings report, the company plans to publish a commentary by Stacy J. Smith, Intel CFO and executive vice president, at www.intc.com/results.cfm. A public webcast of Intel’s earnings conference call will follow at 2 p.m. PDT at www.intc.com.

About Intel

Intel (NASDAQ: INTC) is a world leader in computing innovation. The company designs and builds the essential technologies that serve as the foundation for the world’s computing devices. As a leader in corporate responsibility and sustainability, Intel also manufactures the world's first commercially available "conflict-free" microprocessors. Additional information about Intel is available at newsroom.intel.com and blogs.intel.com and about Intel's conflict-free efforts at conflictfree.intel.com.

Intel, the Intel logo and Core are trademarks of Intel Corporation in the United States and other countries.

*Other names and brands may be claimed as the property of others.

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Intel/Page 6

INTEL CORPORATION

CONSOLIDATED SUMMARY STATEMENT OF INCOME DATA

(In millions, except per share amounts)



	Three Months Ended						Twelve Months Ended
	Dec 27, 2014			Dec 28, 2013			Dec 27, 2014		Dec 28, 2013
NET REVENUE	$	14,721		$	13,834		$	55,870	$	52,708
Cost of sales	5,100			5,263			20,261		21,187
GROSS MARGIN	9,621			8,571			35,609		31,521

Research and development	2,990			2,826			11,537		10,611
Marketing, general and administrative	2,049			2,006			8,136		8,088
R&D AND MG&A	5,039			4,832			19,673		18,699
Restructuring and asset impairment charges	57			116			295		240
Amortization of acquisition-related intangibles	72			74			294		291
OPERATING EXPENSES	5,168			5,022			20,262		19,230
OPERATING INCOME	4,453			3,549			15,347		12,291
Gains (losses) on equity investments, net	233			34			411		471
Interest and other, net	(27		)	(32		)	43		(151		)
INCOME BEFORE TAXES	4,659			3,551			15,801		12,611
Provision for taxes	998			926			4,097		2,991
NET INCOME	$	3,661		$	2,625		$	11,704	$	9,620

BASIC EARNINGS PER COMMON SHARE OF COMMON STOCK	$	0.77		$	0.53		$	2.39	$	1.94
DILUTED EARNINGS PER COMMON SHARE OF COMMON STOCK	$	0.74		$	0.51		$	2.31	$	1.89

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
BASIC	4,769			4,971			4,901		4,970
DILUTED	4,940			5,103			5,056		5,097

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INTEL CORPORATION

CONSOLIDATED SUMMARY BALANCE SHEET DATA

(In millions)



	Dec 27, 2014		Sep 27, 2014		Dec 28, 2013
CURRENT ASSETS
Cash and cash equivalents	$	2,561	$	3,143	$	5,674
Short-term investments	2,430		3,451		5,972
Trading assets	9,063		9,000		8,441
Accounts receivable, net	4,427		3,647		3,582
Inventories
Raw materials	462		496		458
Work in process	2,375		2,292		1,998
Finished goods	1,436		1,327		1,716
	4,273		4,115		4,172
Deferred tax assets	1,958		1,674		2,594
Other current assets	3,018		2,479		1,649
TOTAL CURRENT ASSETS	27,730		27,509		32,084

Property, plant and equipment, net	33,238		33,135		31,428
Marketable equity securities	7,097		6,514		6,221
Other long-term investments	2,023		2,153		1,473
Goodwill	10,861		10,556		10,513
Identified intangible assets, net	4,446		4,379		5,150
Other long-term assets	6,561		6,370		5,489
TOTAL ASSETS	$	91,956	$	90,616	$	92,358

CURRENT LIABILITIES
Short-term debt	$	1,604	$	1,164	$	281
Accounts payable	2,748		2,597		2,969
Accrued compensation and benefits	3,475		2,931		3,123
Accrued advertising	1,092		1,100		1,021
Deferred income	2,205		2,189		2,096
Other accrued liabilities	4,895		4,923		4,078
TOTAL CURRENT LIABILITIES	16,019		14,904		13,568

Long-term debt	12,107		12,103		13,165
Long-term deferred tax liabilities	3,775		3,551		4,397
Other long-term liabilities	3,278		3,070		2,972

TEMPORARY EQUITY	912		915		—

Stockholders' equity
Preferred Stock	—		—		—
Common stock and capital in excess of par value	21,781		21,894		21,536
Accumulated other comprehensive income (loss)	666		946		1,243
Retained Earnings	33,418		33,233		35,477
TOTAL STOCKHOLDERS' EQUITY	55,865		56,073		58,256
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY	$	91,956	$	90,616	$	92,358

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INTEL CORPORATION

SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION

(In millions)



	Q4 2014			Q3 2014			Q4 2013
CASH INVESTMENTS:
Cash and short-term investments	$	4,991		$	6,594		$	11,646
Trading assets	9,063			9,000			8,441
Total cash investments	$	14,054		$	15,594		$	20,087

CURRENT DEFERRED INCOME:
Deferred income on shipments of components to distributors	$	944		$	992		$	852
Deferred income from software and services group	1,261			1,197			1,244
Total current deferred income	$	2,205		$	2,189		$	2,096

SELECTED CASH FLOW INFORMATION:
Depreciation	$	1,889		$	1,891		$	1,667
Share-based compensation	$	281		$	281		$	263
Amortization of intangibles	$	279		$	307		$	289
Capital spending*	$	(2,143	)	$	(2,445	)	$	(2,948	)
Net cash (used)/received for acquisitions/divestitures	$	(741	)	$	(56	)	$	(43	)
Investments in non-marketable equity instruments	$	(47	)	$	(215	)	$	(182	)
Stock repurchase program	$	(4,000	)	$	(4,166	)	$	(528	)
Proceeds from sales of shares to employees & excess tax benefit	$	107		$	605		$	287
Dividends paid	$	(1,069	)	$	(1,095	)	$	(1,121	)

EARNINGS PER COMMON SHARE INFORMATION:
Weighted average common shares outstanding - basic	4,769			4,880			4,971
Dilutive effect of employee equity incentive plans	81			76			69
Dilutive effect of convertible debt	90			89			63
Weighted average common shares outstanding - diluted	4,940			5,045			5,103

STOCK BUYBACK:
Shares repurchased	115			119			22
Cumulative shares repurchased (in billions)	4.7			4.6			4.4
Remaining dollars authorized for buyback (in billions)	$	12.4		$	16.4		$	3.2

OTHER INFORMATION:
Employees (in thousands)	106.7			105.6			107.6

*135 million of equipment received in 2014 is excluded from capital spending. The majority of this equipment was prepaid in 2010 and 2011, and was reflected as cash from operations in the respective periods in which the cash was paid.

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INTEL CORPORATION

SUPPLEMENTAL OPERATING SEGMENT RESULTS

(In millions)



	Three Months Ended						Twelve Months Ended
	Dec 27, 2014			Dec 28, 2013			Dec 27, 2014			Dec 28, 2013
Net Revenue
PC Client Group	$	8,871		$	8,616		$	34,669		$	33,270
Data Center Group	4,091			3,262			14,387			12,161
Internet of Things Group	591			538			2,142			1,801
Mobile and Communications Group	(6		)	326			202			1,375
Software and services operating segments	557			591			2,216			2,190
All other	617			501			2,254			1,911
TOTAL NET REVENUE	$	14,721		$	13,834		$	55,870		$	52,708

Operating income (loss)
PC Client Group	$	3,979		$	3,374		$	14,635		$	11,751
Data Center Group	2,230			1,603			7,279			5,569
Internet of Things Group	185			208			616			550
Mobile and Communications Group	(1,110		)	(874		)	(4,206		)	(3,148		)
Software and services operating segments	25			30			55			24
All other	(856		)	(792		)	(3,032		)	(2,455		)
TOTAL OPERATING INCOME	$	4,453		$	3,549		$	15,347		$	12,291

In the first three months of 2014, we formed the Internet of Things Group, which includes platforms and software optimized for the Internet of Things market segment. Additionally, we changed our organizational structure to align with our critical objectives, which changed information that our Chief Operating Decision Maker (CODM) reviews for purposes of allocating resources and assessing performance. After the reorganization, we have nine operating segments: PC Client Group, Data Center Group, Internet of Things Group, Mobile and Communication Group, McAfee, Software and Services Group, Non-Volatile Memory Solutions Group, Netbook Group, and New Devices Group. All prior-period amounts have been adjusted retrospectively to reflect these operating segment changes, as well as other minor reorganizations.

Our operating segment results shown above are comprised of the following:


•	PC Client Group: Delivering platforms designed for the notebook (including Ultrabook™ devices and 2 in 1 systems), the desktop (including all-in-ones and high-end enthusiast PCs), and tablets; wireless and wired connectivity products; as well as home gateway and set-top box components.


•	Data Center Group: Delivering platforms designed for the server, workstation, networking and storage computing market segments.


•	Internet of Things Group: Delivering platforms designed for embedded market segments including retail, transportation, industrial, and buildings and home, along with a broad range of other market segments.


•	Mobile and Communications Group: Delivering platforms designed for the tablet and smartphone market segments; and mobile communications components such as baseband processors, radio frequency transceivers, Wi-Fi, Bluetooth*, global navigation satellite systems, and power management chips.


•	Software and services operating segments consists of the following:


◦	McAfee: A wholly owned subsidiary delivering software products for endpoint security, network and content security, risk and compliance, and consumer and mobile security.


◦	Software and Services Group: Delivering software products and services that promote Intel architecture as the platform of choice for software development.


•	All other category includes revenue, expenses, and charges such as:


◦	Results of operations from our Non-Volatile Memory Solutions Group, Netbook Group, and New Devices Group;


◦	Amounts included within restructuring and asset impairment charges;


◦	A portion of profit-dependent compensation and other expenses not allocated to the operating segments;


◦	Divested businesses for which discrete operating results are not regularly reviewed by our CODM;


◦	Results of operations of startup businesses that support our initiatives, including our foundry business;


◦	Acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill.

*The Bluetooth^® word mark is a registered trademark owned by Bluetooth SIG, Inc. and any use of such marks by Intel Corporation is under license.

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INTEL CORPORATION

SUPPLEMENTAL PLATFORM REVENUE INFORMATION



	Q4 2014	Q4 2014	2014
	compared to Q3 2014	compared to Q4 2013	compared to 2013
PC Client Group Platform
Unit Volumes	(5)%	6%	8%
Average Selling Prices	3%	(2)%	(4)%

Data Center Group Platform
Unit Volumes	5%	15%	8%
Average Selling Prices	7%	10%	10%

PC Client Group Notebook and Desktop Platform Key Drivers

- Notebook platform volumes increased 11% from 2013 to 2014

- Notebook platform average selling prices decreased 7% from 2013 to 2014

- Desktop platform volumes increased 3% from 2013 to 2014

- Desktop platform average selling prices increased 2% from 2013 to 2014

- Notebook platform volumes increased 11% from Q4 2013 to Q4 2014

- Notebook platform average selling prices decreased 3% from Q4 2013 to Q4 2014

- Desktop platform volumes decreased 1% from Q4 2013 to Q4 2014

- Desktop platform average selling prices flat from Q4 2013 to Q4 2014

- Notebook platform volumes decreased 6% from Q3 2014 to Q4 2014

- Notebook platform average selling prices increased 5% from Q3 2014 to Q4 2014

- Desktop platform volumes decreased 2% from Q3 2014 to Q4 2014

- Desktop platform average selling prices increased 1% from Q3 2014 to Q4 2014

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INTEL CORPORATION

EXPLANATION OF NON-GAAP MEASURES

In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), the accompanying Q4 2014 earnings conference contains references to non-GAAP financial measures of gross cash, net cash and other longer term investments, which are used by management when assessing our sources of liquidity and capital resources. We believe these non-GAAP financial measures are helpful to investors in understanding our capital structure and how we manage our resources. These non-GAAP financial measures 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.

SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS



	Dec 27, 2014			Sep 27, 2014			Dec 28, 2013			Dec 25, 2010

GAAP CASH AND CASH EQUIVALENTS	$	2,561		$	3,143		$	5,674		$	5,498
Short-term investments	2,430			3,451			5,972			11,294
Trading assets	9,063			9,000			8,441			5,093
Total cash investments	$	14,054		$	15,594		$	20,087		$	21,885

GAAP OTHER LONG-TERM INVESTMENTS	$	2,023		$	2,153		$	1,473		$	3,026
Loans receivable and other	1,285			1,355			1,226			1,016
Reverse repurchase agreements with original maturities greater than approximately three months	450			450			400			—
NON-GAAP OTHER LONGER TERM INVESTMENTS	$	3,758		$	3,958		$	3,099		$	4,042
NON-GAAP GROSS CASH	$	17,812		$	19,552		$	23,186		$	25,927

	Dec 27, 2014			Sep 27, 2014			Dec 28, 2013			Dec 25, 2010

GAAP CASH AND CASH EQUIVALENTS	$	2,561		$	3,143		$	5,674		$	5,498
Short-term investments	2,430			3,451			5,972			11,294
Trading assets	9,063			9,000			8,441			5,093
Total cash investments	$	14,054		$	15,594		$	20,087		$	21,885
Short-term debt	(1,604		)	(1,164		)	(281		)	(38		)
Long-term debt	(12,107		)	(12,103		)	(13,165		)	(2,077		)
NON-GAAP NET CASH (excluding other longer term investments)	$	343		$	2,327		$	6,641		$	19,770

GAAP OTHER LONG-TERM INVESTMENTS	$	2,023		$	2,153		$	1,473		$	3,026
Loans receivable and other	1,285			1,355			1,226			1,016
Reverse repurchase agreements with original maturities greater than approximately three months	450			450			400			—
NON-GAAP OTHER LONGER TERM INVESTMENTS	$	3,758		$	3,958		$	3,099		$	4,042
NON-GAAP NET CASH (including other longer term investments)	$	4,101		$	6,285		$	9,740		$	23,812

Exhibit 99.2



Intel Corporation 2200 Mission College Blvd. Santa Clara, CA 95054-1549

CFO Commentary on Full Year 2014 and Fourth-Quarter Results

Summary

2014 ended with better results than we expected at the start of the year. Revenue of $55.9B was up 6%, operating income of $15.3B was up 25%, and earnings per share of $2.31 was up 22% from 2013.

Focusing on our fourth quarter results, we achieved record revenue of $14.7B, up 6% from a year ago. PC Client Group revenue was down 3% quarter over quarter and up 3% from a year ago. The Data Center Group was up 11% quarter over quarter and up 25% from a year ago. Gross margin of 65.4% was up about half a point from the third quarter and up 1 point from our prior Outlook. Operating income for the fourth quarter was $4.5B, up $0.9B, or 25% from a year ago. Earnings per share was $0.74, up 45% from a year ago.

For full year 2014, both the PC business and the Data Center business outperformed our expectations at the start of the year. PC Client Group revenue grew by 4% from 2013. We saw PC Client Group platform volumes grow 8% year over year and, inclusive of tablets, we saw 18% unit growth. We saw robust growth in our Data Center business with 8% unit growth and 18% revenue growth on a year over year basis.

The full year 2014 results when compared to the full year 2013 results were the following:


•	Revenue of $55.9B was up 6%, from $52.7B


•	Gross margin of 63.7% was up 3.9 points from 59.8%


•	Operating income of $15.3B was up 25% from $12.3B


•	Net income of $11.7B was up 22% from $9.6B


•	Earnings per share of $2.31 was up 22% from $1.89

The fourth quarter 2014 results when compared to the fourth quarter from a year ago were the following:


•	Revenue of $14.7B was up $0.9B (6%) from $13.8B


•	Gross margin of 65.4% was up 3.4 points from 62.0%


•	Operating income of $4.5B was up $0.9B (25%) from $3.5B


•	Net income of $3.7B was up $1.0B (39%) from $2.6B


•	Earnings per share of $0.74 was up $0.23 (45%) from $0.51

Page 2

Fourth Quarter 2014

Revenue

Revenue of $14.7B was up 1% sequentially and up 6% on a year-on-year basis. Total platform* volumes, across PC and Data Center, were up 7% on a year-on-year basis. Total platform* average selling prices were up 3% over this same time period.

•

PC Client Group had revenue of $8.9B, up 3% on a year-on-year basis with platform volumes up 6% and platform average selling prices down 2% over that same period. On a year-on-year basis, desktop platform volumes were down 1% and desktop platform average selling prices were flat. Notebook platform volumes were up 11% and notebook platform average selling prices were down 3% over that same horizon. Relative to the third quarter, PC Client Group revenue was down 3% with platform volumes down 5% and platform average selling prices up 3%.


•	The Data Center Group had revenue of $4.1B, up 25% on a year-on-year basis with platform volumes up 15% and platform average selling prices up 10% over this same period. Relative to the third quarter, Data Center Group revenue was up 11% with platform volumes up 5% and platform average selling prices up 7%.


•	Internet of Things Group had revenue of $591M, up 10% on a year-on-year basis, up 12% from the third quarter.


•	Mobile and Communications Group had negative revenue of $6M, down from $1M from the third quarter.


•	The software and services operating segments had revenue of $557M, down 6% on a year-on-year basis, flat when compared to the third quarter.


•	All other operating segments had revenue of $617M, up 23% on a year-on-year basis, up 7% from the third quarter.

Gross Margin

Gross margin dollars were $9.6B, up $163M compared to the third quarter. Gross margin of 65.4% was up 0.4 point compared to the third quarter, and up 1.4 points when compared to the midpoint of our Outlook provided on October 14.

Gross Margin Reconciliation: Q3'14 to Q4'14 (65.0% to 65.4%, up 0.4 point)

[note: point attributions are approximate]


•	+ 2.0 points: Higher platform* average selling prices


•	+ 1.5 points: Lower production costs on 14nm products


•	- 1.5 points: Higher platform* unit costs primarily on higher mix of 14nm products


•	- 0.5 point: Higher factory start-up costs


•	- 0.5 point: Lower platform* volumes

Gross Margin Reconciliation: Q4'14 Outlook to Q4'14 (64% +/- couple points to 65.4%, up 1.4 point)

[note: point attributions are approximate]


•	+ 1.5 points: Higher platform* average selling prices


•	+ 0.5 points: Lower factory start-up costs and other non-production cost of sales


•	- 0.5 point: Lower platform* volumes

*PC Client Group and Data Center Group microprocessors and chipsets

Page 3

Gross Margin Reconciliation: Q4'13 to Q4'14 (62.0% to 65.4%, up 3.4 points)

When comparing to the fourth quarter from a year ago, gross margin was up 3.4 points primarily due to lower factory start-up costs, lower platform* unit costs, higher platform* average selling prices, and higher platform* volumes. These increases were partially offset by the impact of higher tablet volumes and higher production costs on 14nm products.

Spending

Spending for R&D and MG&A was $5.0B, up approximately $200M from the third quarter, and up approximately $100M from our Outlook provided on October 14. The overall increase in spending compared to our prior Outlook was driven by an increase in profit dependent spending. R&D and MG&A as a percentage of revenue was 34%, up from 33% in the third quarter.

Depreciation was $1.9B, in line with expectations.

Restructuring and asset impairment charges in the fourth quarter were $57M, in line with expectations.

Amortization of acquisition related intangibles was $72M, in line with expectations.

Other Income Statement Items

Gains and losses on equity investments and interest and other income was a net gain of $206M compared to a $10M net gain in the third quarter and our Outlook provided on October 14 of approximately $175M.

The effective tax rate for the fourth quarter was 21%, down 5.7 points from the third quarter driven by the reenactment of the U.S. R&D tax credit.

Balance Sheet and Cash Flow Items

On the balance sheet, total cash investments^^ ended the quarter at $14.1B, down $1.5B from the third quarter. $12.0B of the total $14.1B total cash investments^^ is held by non-U.S. subsidiaries. Cash flow from operations in the fourth quarter was approximately $5.8B. During the fourth quarter, we paid approximately $1.1B in dividends, purchased $2.1B in capital assets and repurchased $4.0B in stock. Total inventories were up $158M.

Other Items

The total number of employees was up 1K from the third quarter to 107K.

Diluted shares outstanding decreased by 105M shares from the third quarter to 4.9B shares driven by third quarter and fourth quarter share repurchases. Diluted shares outstanding is calculated based on a weighted average of shares outstanding during the quarter. As a result, a portion of the $4.2B of third quarter share repurchases and a portion of the $4.0B of the fourth quarter share repurchases are reflected in our fourth quarter weighting for diluted shares outstanding. The remaining 25M share impact of our fourth quarter repurchases will be included in our first quarter of 2015 diluted shares outstanding.

*PC Client Group and Data Center Group microprocessors and chipsets

^^ Cash and cash equivalents, short-term investments, and trading assets

Page 4

Full Year 2014

Revenue

Revenue of $55.9B was up 6% from 2013. Total platform* volume was up 8% from 2013. Total platform* average selling prices were flat over this same period.


•	The PC Client Group had revenue of $34.7B, up 4% from 2013. PC Client Group platform

volume was up 8% from 2013 and platform average selling prices were down 4% over that same period. Desktop platform volume was up 3% and desktop platform average selling prices were up 2% from 2013. Notebook platform volume was up 11% and notebook platform average selling prices were down 7% from 2013.


•	The Data Center Group had revenue of $14.4B, up 18% from 2013. Data Center Group platform volume was up 8% and platform average selling prices were up 10% over that same period.


•	Internet of Things Group had revenue of $2.1B, up 19% from 2013.


•	Mobile and Communications Group had revenue of $202M, down 85% from 2013.


•	The software and services operating segments had revenue of $2.2B, up 1% from 2013.


•	All other operating segments had revenue of $2.3B, up 18% from 2013.

Gross Margin

Gross margin dollars were $35.6B, up $4.1B from 2013. Gross margin of 63.7% was up 3.9 points

from 2013 driven by lower platform* unit costs on 22nm, lower start-up costs, and higher platform* volumes, these increases were partially offset by the increase in tablet volumes.

Spending

Spending for R&D and MG&A was $19.7B, up 5% from 2013 primarily as a result of increased

investment in R&D and higher profit dependent spending. R&D and MG&A as a percentage of revenue was 35%, flat compared to 2013.

R&D spending was $11.5B, up 9% from 2013.

MG&A spending was $8.1B, up 1% from 2013.

Depreciation was $7.4B, up from $6.8B in 2013.

Restructuring and asset impairment charges for 2014 were $295M, up from $240M in 2013.

Amortization of acquisition related intangibles was $294M, up from $291M in 2013.

Other Income Statement Items

Gains and losses on equity investments and interest and other income was a net gain of $454M, higher

than the net $320M gain in 2013.

The effective tax rate for 2014 was 26%, up 2.2 points in 2013 driven by the reenactment of the U.S. R&D tax credit.

*PC Client Group and Data Center Group microprocessors and chipsets

^^ Cash and cash equivalents, short-term investments, and trading assets

Page 5

Balance Sheet and Cash Flow Items

Cash flow from operations in 2014 was approximately $20.4B. On the balance sheet, total cash

investments^^ ended the year at $14.1B, down $6.0B from 2013. During 2014, we paid approximately $4.4B in dividends, purchased $10.1B in capital assets, and repurchased $10.8B in stock. Total inventories were down approximately $101M from a year ago.

Other Items

The number of employees in the company is approximately 107K, down from approximately 108K in 2013.

Q1 2015 Outlook

Intel's Business Outlook for the first quarter does not include the effect of any business combinations, asset acquisitions, divestitures, or other investments that may be completed after January 15. The midpoint of the forecast ranges will be referred to when making comparisons to specific periods.

Revenue

Revenue is expected to be $13.7B, plus or minus $500M in the first quarter. The midpoint of this range is down 7% from the fourth quarter, in line with the average seasonal decrease for the first quarter.

Gross Margin

Gross margin in the first quarter is expected to be 60%, plus or minus a couple of points, down 5.4 points from the fourth quarter.

Gross Margin Reconciliation: Q4'14 to Q1'15 Outlook (65.4% to 60% +/- a couple points)

[note: point attributions are approximate]


•	- 2.0 points: Higher platform* unit costs primarily on 14nm products


•	- 1.5 points: Higher factory start-up costs


•	- 1.0 point: Lower platform* volumes


•	- 0.5 point: Higher platform* write-offs (primarily higher pre-qualification costs on Skylake)

Spending

Spending for R&D and MG&A in the first quarter is expected to be approximately $4.9B, down approximately $140M from the fourth quarter.

Depreciation is forecast to be approximately $1.8B, flat to the fourth quarter.

Restructuring charges are forecast to be approximately $40M.

Amortization of acquisition-related intangibles is forecast to be approximately $65M.

Other Income Statement Items

Gains and losses from equity investments and interest and other income are expected to be approximately zero, compared to a net gain of $206M in the fourth quarter.

*PC Client Group and Data Center Group microprocessors and chipsets

^^ Cash and cash equivalents, short-term investments, and trading assets

Page 6

2015 Outlook

The Outlook for full year 2015 does not include the effect of any acquisitions, divestitures or similar transactions that may be completed after January 15.

Revenue

Revenue for the year is expected to grow in the mid-single digits percentage points.

Gross Margin

Gross margin for the year is expected to be 62%, plus or minus a couple points, down from 2014.

Gross Margin Reconciliation: 2014 to 2015 Outlook (63.7% to 62% +/- a couple points)

[note: point attributions are approximate]


•	- 2.0 points: Higher platform* unit costs primarily on 14nm products


•	- 1.0 point: Higher factory start-up costs


•	+ 0.5 point: Lower production costs on 14nm


•	+ 0.5 point: Tablet Impact

Spending

Spending for R&D and MG&A for the year is expected to be approximately $20.0B plus or minus $400 million, up from 2014.

R&D spending is expected to be approximately $12.2B, up from 2014.

MG&A spending is expected to be approximately $7.9B, down from 2014.

Depreciation is forecast to be approximately $8.1B plus or minus $100M.

Amortization of acquisition-related intangibles is forecast to be approximately $255M.

Other Income Statement Items

The tax rate for 2015 is expected to be 27%, approximately flat to 2014.

Balance Sheet and Cash Flow Items

Capital spending for 2015 is expected to be $10.0B plus or minus $500M, up from 2014.

*PC Client Group and Data Center Group microprocessors and chipsets

Page 7

Risk Factors

•


•	Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in the short term.


•	The amount, timing and execution of Intel’s stock repurchase program and dividend program could be affected by changes in Intel’s priorities for the use of cash, such as operational spending, capital spending, acquisitions, and as a result of changes to Intel’s cash flows and changes in tax laws.

•


•	Gains or losses from equity securities and interest and other could vary from expectations depending on gains or losses on the sale, exchange, changes in the fair value or impairments of debt and equity investments, interest rates, cash balances and changes in the fair value of derivative instruments.


•	Product defects or errata (deviations from published specifications) may adversely impact our expenses, revenues and reputation.

Page 8

•


•	Intel’s results may be affected by the timing of closing of acquisitions, divestitures and other significant transactions.

A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the company’s most recent reports on Form 10-K and Form 10-Q.

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