UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended September 28, 1996
OR
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ______ to ______
Commission File Number 0-6217
INTEL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 94-1672743
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2200 Mission College Boulevard, Santa Clara, California 95052-8119
(Address of principal executive offices) (Zip Code)
(408) 765-8080
(Registrant's telephone number, including area code)
N/A
(Former name, former address, and former fiscal year, if changed since
last report.)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No
Shares outstanding of the Registrant's common stock:
Class Outstanding at September 28, 1996
Common Stock, $.001 par value 820.6 million
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Intel Corporation
Consolidated Condensed Statements of Income (unaudited)
(in millions, except per share amounts)
Three Months Ended Nine Months Ended
------------------ -----------------
Sept. 28, Sept. 30, Sept. 28, Sept. 30,
1996 1995 1996 1995
-------- -------- -------- --------
Net revenues $ 5,142 $ 4,171 $14,407 $11,622
Costs and expenses:
Cost of sales 2,201 2,008 6,772 5,422
Research and development 449 334 1,288 944
Marketing, general and
administrative 565 440 1,600 1,274
------- ------- ------- -------
Operating costs and
expenses 3,215 2,782 9,660 7,640
------- ------- ------- -------
Operating income 1,927 1,389 4,747 3,982
Interest expense (6) (7) (14) (24)
Interest and other
income, net 97 101 262 340
------- ------- ------- -------
Income before provision
for taxes 2,018 1,483 4,995 4,298
Provision for taxes 706 552 1,748 1,599
------- ------- ------- -------
Net income $ 1,312 $ 931 $ 3,247 $ 2,699
======= ======= ======= =======
Earnings per common and
common equivalent share $ 1.48 $ 1.05 $ 3.67 $ 3.06
======= ======= ======= =======
Cash dividends declared
per common share $ 0.05 $ 0.04 $ 0.14 $ 0.11
======= ======= ======= =======
Weighted average number
of common and common
equivalent shares
outstanding 885 889 884 883
======= ======= ======= =======
(See Notes to Consolidated Condensed Financial Statements.)
<PAGE> 3
PART I - (continued)
Item 1. Financial Statements (Continued)
Intel Corporation
Consolidated Condensed Balance Sheets Sept. 28, Dec. 30,
(in millions) 1996 1995
---------------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 3,513 $ 1,463
Short-term investments 2,307 995
Accounts receivable, net 3,488 3,116
Inventories:
Raw materials 320 674
Work in process 712 707
Finished goods 338 623
------- -------
1,370 2,004
------- -------
Deferred tax assets 430 408
Other current assets 107 111
------- -------
Total current assets 11,215 8,097
------- -------
Property, plant and equipment, at cost 13,621 11,792
Less: Accumulated depreciation (5,363) (4,321)
------- -------
Property, plant and equipment, net 8,258 7,471
Long-term investments 1,407 1,653
Other assets 192 283
------- -------
TOTAL ASSETS $21,072 $17,504
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 409 $ 346
Accounts payable 790 864
Accrued compensation and benefits 825 758
Accrued advertising 331 218
Other accrued liabilities 506 328
Deferred income on shipments to distributors 342 304
Income taxes payable 803 801
------- -------
Total current liabilities 4,006 3,619
------- -------
Long-term debt 702 400
Deferred tax liabilities 853 620
Put warrants 547 725
Stockholders' equity:
Preferred stock -- --
Common stock and capital in excess
of par value 2,830 2,583
Retained earnings 12,134 9,557
------- -------
Total stockholders' equity 14,964 12,140
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $21,072 $17,504
======= =======
(See Notes to Consolidated Condensed Financial Statements.)
<PAGE> 4
PART I - (continued)
Item 1. Financial Statements (Continued)
Intel Corporation
Consolidated Condensed Statements of Cash Flows
(unaudited, in millions)
Nine Months Ended
-----------------
Sept. 28, Sept. 30,
1996 1995
Cash flows provided by (used for) operating -------- --------
activities:
Net income $ 3,247 $ 2,699
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 1,369 985
Net loss on retirements of property,
plant and equipment 78 51
Amortization of debt discount -- 9
Change in deferred tax assets and liabilities 158 185
Changes in assets and liabilities:
(Increase) in accounts receivable (372) (1,383)
Decrease (increase) in inventories 634 (941)
Decrease (increase) in other assets 38 (269)
(Decrease) increase in accounts payable (74) 366
Increase in accrued compensation and benefits 67 42
Increase in income taxes payable 2 457
Increase (decrease) in other liabilities 321 (145)
Tax benefit from employee stock plans 98 94
Purchases of trading assets (75) --
Gain on trading assets (5) --
------ ------
Total adjustments 2,239 (549)
------ ------
Net cash provided by operating activities 5,486 2,150
Cash flows provided by (used for) investing ------ ------
activities:
Additions to property, plant and equipment (2,234) (2,570)
Purchases of long-term, available-for-sale
investments (40) (98)
Sales of long-term, available-for-sale
investments -- 114
Maturities and other changes in available-
for-sale investments, net (732) 961
------ ------
Net cash (used for) investing activities (3,006) (1,593)
------ ------
Cash flows provided by (used for) financing
activities:
Increase in short-term debt, net 63 397
Additions to long-term debt 300 --
Proceeds from sales of shares through employee
stock plans and other 225 183
Proceeds from sales of put warrants 56 64
Repurchase and retirement of common stock (967) (971)
Payment of dividends to stockholders (107) (83)
------ ------
Net cash (used for) financing activities (430) (410)
------ ------
Net increase in cash and cash equivalents $2,050 $ 147
====== ======
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 35 $ 67
Income taxes $1,384 $ 863
Certain 1995 amounts have been reclassified to conform to the 1996
presentation.
(See Notes to Consolidated Condensed Financial Statements.)
<PAGE> 5
PART I - (continued)
Item 1. Financial Statements (Continued)
Intel Corporation, Notes to Consolidated Condensed Financial Statements
1. The accompanying interim consolidated condensed financial
statements of Intel Corporation ("Intel," the "Company" or the
"Registrant") have been prepared in conformity with generally
accepted accounting principles, consistent in all material
respects with those applied in the Annual Report on Form 10-K for
the year ended December 30, 1995. The interim financial
information is unaudited, but reflects all normal adjustments
which are, in the opinion of management, necessary to provide a
fair statement of results for the interim periods presented. The
interim financial statements should be read in connection with the
financial statements in the Company's Annual Report on Form 10-K
for the year ended December 30, 1995.
2. Interest and other income includes (in millions):
Three Months Ended Nine Months Ended
------------------ -----------------
Sept. 28, Sept. 30, Sept. 28, Sept. 30,
1996 1995 1996 1995
-------- -------- -------- --------
Interest income $ 91 $ 61 $249 $210
Foreign currency 2 8 16 18
gains
Other income
(expense), net 4 32 (3) 112
---- ---- ---- ----
Total $ 97 $101 $262 $340
==== ==== ==== ====
Other income for the nine months ended September 30, 1995 included
approximately $58 million from the settlement of all ongoing
litigation with Advanced Micro Devices, Inc. and $23 million from
the sale of a portion of the Company's interest in VLSI
Technologies, Inc. (both occurring in the first quarter of 1995),
and $37 million from the sale of a portion of the Company's
interest in Altera Corporation in the third quarter of 1995.
3. Earnings per common and common equivalent share as presented on
the face of the statements of income represent primary earnings
per share. Dual presentation of primary and fully diluted earnings
per share has not been made because the differences are
insignificant.
4. The Company's available-for-sale investments are reported at fair
value, with unrealized gains and losses, net of tax, recorded in
stockholders' equity. Realized gains or losses and declines in
value, if any, judged to be other than temporary on available-for-
sale securities are reported in other income or expense. Beginning
in the first quarter of 1996, the Company purchased securities
classified as trading assets. The Company's trading assets ($80
million at September 28, 1996) are held to generate returns to
offset changes in certain liabilities related to deferred
compensation arrangements. The trading assets consist of
marketable equity securities and are stated at fair value. Both
realized and unrealized gains and losses on trading assets are
included in other income or expense and generally offset the
change in the deferred compensation liability which is also
included in other income or expense.
5. As more fully described in the Company's Annual Report, Intel
enters into derivative financial instruments to reduce financial
market risks. These instruments are used to hedge foreign
currency, equity and interest rate market exposures of underlying
assets, liabilities and other obligations. The Company does not
use derivative financial instruments for speculative or trading
purposes. The Company's accounting policies for these instruments
are based on the Company's designation of such instruments as
hedging transactions. The criteria the Company uses for
designating an instrument as a hedge include its effectiveness in
risk reduction and one-to-one matching of derivative instruments
to underlying transactions.
<PAGE> 6
PART I - (continued)
Item 1. Financial Statements (Continued)
Intel Corporation, Notes to Consolidated Condensed Financial Statements
(continued)
Gains and losses on currency forward contracts, and options that
are designated and effective as hedges of anticipated
transactions, for which a firm commitment has been attained, are
deferred and recognized in income in the same period that the
underlying transactions are settled. Gains and losses on currency
forward contracts, options and swaps that are designated and
effective as hedges of existing transactions are recognized in
income in the same period as losses and gains on the underlying
transactions are recognized and generally offset. Income or
expense on swaps is accrued as an adjustment to the yield of the
related investments or debt they hedge.
6. During the third quarter of 1996, the Company repurchased 8.0
million shares of Common Stock under the Company's authorized
repurchase program at a cost of $598 million. As of September 28,
1996, after reserving shares to cover the outstanding put
warrants, approximately 19.3 million shares remained available
under the repurchase program (total authorization of 110 million
shares) authorized by the Board of Directors. (See Item 2.
Management's Discussion and Analysis for subsequent activity.)
7. In a series of private placements during the 1991-1996 period, the
Company sold put warrants that entitle the holder of each warrant
to sell one share of Common Stock to the Company, at a specified
price, if the holder exercises the warrant. Activity during the
first nine months of 1996 is summarized as follows:
Put Warrants Outstanding
Cumulative ------------------------
Proceeds Number Potential
(In millions) Received Of Warrants Obligation
----------------------------------------------------------
December 30, 1995 $ 279 12.0 $ 725
Sales 18 3.0 175
Exercises (1.8) (108)
Expirations -- (1.5) (58)
----- ----- -----
March 30, 1996 $ 297 11.7 $734
Sales 18 3.0 202
Expirations -- (3.0) (186)
----- ----- -----
June 29, 1996 $ 315 11.7 $ 750
Sales 20 3.0 226
Expirations -- (6.2) (429)
----- ----- -----
September 28, 1996 $ 335 8.5 $ 547
===== ===== =====
The amount related to the Company's potential buyback obligation
has been reclassified from Stockholders' Equity and recorded as
put warrants. The 8.5 million put warrants outstanding on
September 28, 1996 expire on various dates between November 1996
and August 1997 and have exercise prices ranging from $56.25 to
$80.75 per share, with an average exercise price of $64. There is
no material dilutive effect on earnings per share for the periods
presented. (See Item 2. Management's Discussion and Analysis for
subsequent activity.)
8. On March 29, 1995, Thorn EMI North America Inc. (EMI Group, NA)
brought suit in Federal Court in Delaware against Intel alleging
that certain Intel manufacturing processes infringe a U.S. patent.
In May 1996, the Court granted Intel's motion for summary judgment
on some of the processes in issue. In November 1996, the Court
granted Intel's motion for summary judgment on the remaining
processes in issue and entered judgment in favor of Intel and
against EMI on the claims in EMI's complaint. EMI may appeal this
decision.
9. In August 1996 the Company entered into a private reverse
repurchase arrangement under which it borrowed $300 million,
payable in 2001, at a current effective borrowing rate of LIBOR
less 1.5%. The funds received under this arrangement are
available for general corporate purposes.
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations - Third Quarter of 1996 Compared to Third Quarter of 1995
Revenues for Q3 1996 increased by 23% compared to Q3 1995. Higher
volumes of the rapidly ramping Pentium(TM) processor family, partially
offset by lower processor prices and decreasing revenues from sales of
related board level products, drove the overall growth in revenues.
Revenues from the Intel486(TM) microprocessor family declined
substantially, primarily due to a major shift in market demand toward
the Company's more advanced microprocessors. Chipsets and flash memory
also showed significant revenue growth between these periods.
Cost of sales rose by 10% from Q3 1995 to Q3 1996, primarily due to
increased unit volumes. Gross margin was 57% in Q3 1996 versus 52% in
Q3 1995. The increase in gross margin is due primarily to a shift in
the mix to higher margin products.
A majority and growing portion of the Company's revenues, and a
substantial majority of its gross margin, are derived from sales of the
Pentium processor family including related board level products.
Although sales of the Intel486 microprocessor family represented a
significant portion of Q3 1995 revenues and gross margin, revenues and
gross margin for these products were negligible for Q3 1996.
Research and development expenses and marketing, general and
administrative expenses rose by a total of $240 million, or 31%, from
Q3 1995 to Q3 1996. Spending for internal product and process
development programs, personnel related spending and Intel Inside(R) and
other advertising and marketing expenses accounted for most of the
increase.
Interest and other income for Q3 1996 decreased by $4 million from the
prior year due primarily to the fact that Q3 1995 included a $37
million pretax gain on the sale of a portion of Intel's equity interest
in another company, offset partially by higher average investment
balances in Q3 1996.
The Company utilizes investments and corresponding interest rate swaps
to preserve principal while enhancing the yield on its investment
portfolio without significantly increasing risk, and uses forward
contracts, options and swaps to hedge foreign currency, equity and
interest rate market exposures. Gains and losses on these instruments
are generally offset by those on the underlying hedged transactions; as
a result, there was no net impact on the Company's financial results in
either Q3 1996 or Q3 1995 from hedging activities.
The provision for taxes increased by $154 million, or 28%, primarily as
a result of higher pretax earnings in 1996. In addition, the effective
tax rate decreased from 37.2% for Q3 1995 to 35% for Q3 1996.
Results of Operations - First Nine Months of 1996 Compared to First
Nine Months of 1995
Revenues for the first nine months of 1996 increased by 24% compared to
the first nine months of 1995. Higher volumes of the rapidly ramping
Pentium processor family, partially offset by lower processor prices
and decreasing revenues from sales of related board level products
drove the overall growth in revenues. Revenues from the Intel486
microprocessor family declined substantially, primarily due to a major
shift in market demand toward the Company's more advanced
microprocessors. Chipsets and flash memory also showed significant
revenue growth between these periods.
Cost of sales rose by 25% from the first nine months of 1995 to the
first nine months of 1996, primarily due to increased unit volumes.
Gross margin was 53% in the first nine months of 1996 and 53% in the
first nine months of 1995.
<PAGE> 8
Results of Operations - First Nine Months of 1996 Compared to First
Nine Months of 1995 (continued)
A majority and growing portion of the Company's revenues, and a
substantial majority of its gross margin, are derived from sales of the
Pentium processor family including related board level products.
Although sales of the Intel486 microprocessor family represented a
significant portion of revenues and gross margin in the first nine
months of 1995, revenues and gross margin for these products were
negligible for the first nine months of 1996.
Research and development expenses and marketing, general and
administrative expenses rose by a total of $670 million, or 30%, from
the first nine months of 1995 to the first nine months of 1996.
Spending for internal product and process development programs,
personnel related spending and Intel Inside and other advertising and
marketing expenses accounted for most of the increase.
Interest and other income for the first nine months of 1996 decreased
by $78 million over the prior year due primarily to the gains in the
first nine months of 1995 from the settlement of litigation with
Advanced Micro Devices, Inc. and the sale of a portion of Intel's
interest in certain equity investments, partially offset by higher
average investment balances.
The $10 million decrease in interest expense between the first nine
months of 1995 and the first nine months of 1996 is primarily the
result of lower weighted average borrowing balances.
The Company utilizes investments and corresponding interest rate swaps
to preserve principal while enhancing the yield on its investment
portfolio without significantly increasing risk, and uses forward
contracts, options and swaps to hedge foreign currency, equity and
interest rate market exposures. Gains and losses on these instruments
are generally offset by those on the underlying hedged transactions; as
a result, there was no net impact on the Company's financial results in
either the first nine months of 1996 or the first nine months of 1995
from hedging activities.
The provision for taxes increased by $149 million from the first nine
months of 1995 to the first nine months of 1996, primarily due by an
increase in pretax earnings in 1996. In addition, the effective tax
rate decreased from 37.2% for the first nine months of 1995 to 35% for
the first nine months of 1996.
Financial Condition
The Company's financial condition remains very strong. As of September
28, 1996, Intel's portfolio of cash and investments totaled $7.23
billion, up from $4.11 billion at December 30, 1995. The Company's
other sources of liquidity include credit lines and commercial paper
borrowing arrangements that exceed $1.8 billion in the aggregate. The
Company also retains the authority to issue an aggregate of
approximately $1.4 billion in debt, equity and other securities under
SEC shelf registration statements.
The Company funded most of its investment needs during the first nine
months of 1996 with cash generated from operations, which totaled $5.49
billion. Major uses of cash during the first nine months of 1996
included capital spending of $2.23 billion for property, plant and
equipment, primarily for microprocessor manufacturing capacity and $967
million to buy back 14.1 million shares of common stock. Other sources
of cash during the first nine months of 1996 included $300 million
under a private reverse repurchase arrangement and $225 million in
proceeds from the sale of shares primarily pursuant to employee stock
plans.
Inventory levels, particularly raw material and finished goods,
decreased significantly during the first nine months of 1996, primarily
attributable to the sell-through of purchased parts inventory and lower
costs of manufacturing in the first nine months of 1996.
The Company's five largest customers accounted for approximately 30% of
net revenues for the nine month period ended September 28, 1996. At
September 28, 1996, these customers accounted for approximately 25% of
net accounts receivable.
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
Financial Condition (continued)
Key financing activities in the first nine months of 1996 included the
repurchase of 14.1 million shares of Common Stock for $967 million as
part of the Company's authorized stock repurchase program, including
1.8 million shares for $108 million upon the exercise of outstanding
put warrants. The Company also sold 9 million put warrants, receiving
proceeds of $56 million, while 10.7 million outstanding put warrants
expired unexercised including 3.5 million issued in Q2 and Q3 1996
which expired upon the Company's stock price reaching certain levels
above the exercise price for such warrants. Through November 11, 1996,
3.0 million put warrants expired unexercised, including 1 million put
warrants issued in Q3 which expired upon the Company's stock price
reaching certain levels above the exercise price for such warrants. As
of November 11, 1996, Intel had the potential obligation to repurchase
5.5 million shares of Common Stock at an aggregate cost of $337 million
under outstanding put warrants. The exercise price of these warrants
ranges from $56 to $69 per share, with an average exercise price of $61
per share. As of November 11, 1996, 22.3 million shares remained
available for repurchase under the repurchase authorization, after
reserving shares to cover outstanding put warrants.
Management considers cash flow from operations and available sources of
liquidity to be adequate to meet business requirements in the
foreseeable future, including planned capital expenditure programs,
working capital requirements, the put warrant obligation and the
dividend program.
Outlook
This outlook section contains a number of forward-looking statements,
all of which are based on current expectations. Actual results may
differ materially.
The Company's book-to-bill ratio was above 1.0 for Q3 1996 and, based
upon current strength in bookings and billings, the Company expects
revenue for the fourth quarter of 1996 to be significantly higher than
third quarter revenue of $5.14 billion. Fourth quarter results are
dependent upon strong seasonal sales of PCs and on continued billings
strength through the remainder of the quarter. Revenue is also a
function of the distribution of microprocessor speeds, which is
difficult to forecast. Because of the large price difference between
microprocessors with the highest and lowest speeds, this distribution
affects the average price Intel will realize and has a large impact on
Intel's revenues.
Intel's strategy has been and continues to be to introduce ever higher
performance microprocessors and work with the software industry to
develop compelling applications that can take advantage of this higher
performance, thus driving demand toward the newer products. In line
with this strategy, the Company continues to be on track to position
the 120-MHz and 133-MHz Pentium processors as the entry-level
processors in the fourth quarter of 1996. If the market demand does not
continue to grow and move rapidly toward higher performance products,
revenue and gross margin may be impacted, the manufacturing capacity
installed might be under-utilized and capital spending may be slowed.
The Company may continue to reduce microprocessor prices aggressively
and systematically to bring its technology to market. The Company
announced that it plans to hold prices on certain members of the
Pentium processor family through the end of 1996. The Company's pricing
policy is subject to change.
Assuming continued strength in billings, the Company expects gross
margin percentage in the fourth quarter to be above the third quarter's
level of 57 percent. Intel's gross margin percentage varies depending
in part on the mix of microprocessors and related motherboards within a
product family because motherboards generally have lower gross margin
percentages than microprocessors. Various other factors, including unit
volumes and cost and yield issues, processor speed mix and mix of
shipments of other semiconductors will also continue to affect the
amount of cost of sales and the variability of gross margin
percentages.
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
Outlook (continued)
To implement its strategy, Intel continues to build capacity to produce
high-performance microprocessors and other products. The Company
currently expects capital expenditures for 1996 not to exceed $3.4
billion. This spending plan is dependent upon delivery times of various
machines and construction schedules for new facilities. The current
estimate is lower than the previous estimate of $3.6 billion due to
delays in initiating construction of administrative facilities.
Spending on research and development and marketing, general and
administrative expenses is expected to increase about 17 to 20 percent
in the fourth quarter of 1996 from the $1.01 billion in the third
quarter of 1996, due primarily to seasonally higher advertising costs
and revenue dependent expenses such as co-marketing programs. Expense
projections in the fourth quarter of 1996 are subject to changes in
revenue dependent expenses.
The Company's future results of operations and the other forward
looking statements contained in this outlook involve a number of risks
and uncertainties. In addition to the factors discussed above, among
the other factors that could cause actual results to differ materially
are the following: business conditions and growth in the personal
computer industry and general economy; changes in customer order
patterns, including timing of delivery and changes in seasonal
fluctuations in PC buying patterns; competitive factors, such as rival
chip architectures, competing software-compatible microprocessors,
acceptance of new products and price pressures; risk of inventory
obsolescence due to shifts in market demand; variations in inventory
valuation; timing of software industry product introductions; continued
success in technological advances, including the manufacturing ramp;
excess or shortage of manufacturing capacity; risks associated with
foreign operations; changes in the mix of microprocessor speeds and
related motherboards; costs and yield issues associated with production
at factories; and litigation involving intellectual property and
consumer issues.
Intel believes that it has the product offerings, facilities,
personnel, and competitive and financial resources for continued
business success, but future revenues, costs, margins, product mix and
profits are all influenced by a number of factors, as discussed above.
<PAGE> 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
A. Litigation
Reference is made to Item 3. Legal Proceedings, in the Registrant's
Annual Report on Form 10-K for the year ended December 30, 1995 and
Part II, Item 1. Legal Proceedings, in the Registrant's Quarterly
Report on Form 10-Q for the quarterly periods ended April 1, 1996, and
June 29, 1996 for a description of the following legal proceeding.
Thorn EMI North America, Inc. (EMI Group, NA)
vs. Intel, DEL (C95-199)
Subsequent to the June, 1996 "Markman" hearing, Intel filed a motion
for summary judgment on the processes remaining at issue. In November
1996, the Court granted Intel's motion for summary judgment on the
remaining processes in issue and entered judgment in favor of Intel and
against EMI on the claims in EMI's complaint. EMI may appeal this
decision.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Statement re: computation of earnings per share.
12.1 Statement setting forth the computation of ratios of earnings
to fixed charges.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended September 28, 1996.
<PAGE> 12
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 thereunto duly authorized.
INTEL CORPORATION
(Registrant)
Date: November 11, 1996 By: /s/Andy D. Bryant
---------------------
Andy D. Bryant
Vice President and
Chief Financial and
Principal Accounting Officer
<TABLE>
Exhibit 11.1
INTEL CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(In millions, except per share amounts)
Three Months Ended Nine Months Ended
------------------- ---------------------
Sept. 28, Sept.30, Sept. 28, Sept. 30,
1996 1995 1996 1995
------------------- --------------------
<S> <C> <C> <C> <C>
PRIMARY SHARES CALCULATION:
Reconciliation of weighted average number
of shares outstanding to amount used in
primary earnings per share computation:
Weighted average number of
shares outstanding 822 822 823 826
Add shares issuable from assumed exercise
of options and warrants 63 67 61 57
------ ------ ------ ------
Weighted average number of shares
outstanding as adjusted 885 889 884 883
====== ====== ====== ======
FULLY DILUTED SHARES CALCULATION:
Reconciliation of weighted average number
of shares outstanding to amount used in
fully diluted earnings per share
computation:
Weighted average number of shares
outstanding 822 822 823 826
Add shares issuable from assumed
exercise of options and warrants 71 67 71 61
------ ------ ------ ------
Weighted average number of shares
outstanding as adjusted 893 889 894 887
====== ====== ====== ======
NET INCOME $1,312 $ 931 $3,247 $2,699
====== ====== ====== ======
PRIMARY EARNINGS PER SHARE $ 1.48 $ 1.05 $ 3.67 $ 3.06
====== ====== ====== ======
(1) FULLY DILUTED EARNINGS PER SHARE $ 1.47 $ 1.05 $ 3.63 $ 3.04
====== ====== ====== ======
(1) Earnings per common equivalent share presented on the face of the
statements of income represent primary earnings per share. Dual presentation
of primary and fully diluted earnings per share has not been made on the
statement of income because the differences are insignificant.
</TABLE>
Exhibit 12.1
INTEL CORPORATION
STATEMENT SETTING FORTH THE COMPUTATION
OF RATIOS OF EARNINGS TO FIXED CHARGES
(in millions)
Nine Months Ended
Sept. 29, Sept.30,
1996 1995
---------------------
Income before taxes $ 4,995 $ 4,298
Add fixed charges net of
capitalized interest 23 31
Income before taxes and fixed
charges (net of capitalized
interest) $ 5,018 $ 4,329
Fixed charges:
Interest* $ 14 $ 24
Capitalized interest 23 32
Estimated interest component
of rental expense 9 7
Total $ 46 $ 63
Ratio of earnings before taxes and
fixed charges, to fixed charges 109.7 68.7
* Interest expense includes the amortization of underwriting
fees for the relevant periods outstanding.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from Intel Corporation's
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND CONSOLIDATED BALANCE SHEETS and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> SEP-28-1996
<CASH> 3513
<SECURITIES> 2307
<RECEIVABLES> 3488<F3>
<ALLOWANCES> 0
<INVENTORY> 1370
<CURRENT-ASSETS> 11215
<PP&E> 13621
<DEPRECIATION> 5363
<TOTAL-ASSETS> 21072
<CURRENT-LIABILITIES> 4006
<BONDS> 702
547<F1>
0
<COMMON> 2830
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 21072
<SALES> 14407
<TOTAL-REVENUES> 14407
<CGS> 6772
<TOTAL-COSTS> 6772
<OTHER-EXPENSES> 1288<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14
<INCOME-PRETAX> 4995
<INCOME-TAX> 1748
<INCOME-CONTINUING> 3247
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3247
<EPS-PRIMARY> 3.67
<EPS-DILUTED> 0
<FN>
<F1>Item consists of put warrants.
<F2>Item consists of research and development.
<F3>Item shown net of allowance, consistent with the balance sheet presentation.
</FN>
</TABLE>
