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 March 29, 1997
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 March 29, 1997
Common Stock, $.001 par value 819 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)
<TABLE>
Three Months Ended
------------------
March 29, March 30,
1997 1996
--------- ---------
<S> <C> <C>
Net revenues $ 6,448 $ 4,644
Costs and expenses:
Cost of sales 2,307 2,421
Research and development 581 401
Marketing, general and
administrative 693 517
--------- ---------
Operating costs and expenses 3,581 3,339
--------- ---------
Operating income 2,867 1,305
Interest expense (7) (5)
Interest income and other, net 215 76
--------- ---------
Income before taxes 3,075 1,376
Provision for taxes 1,092 482
--------- ---------
Net income $ 1,983 $ 894
========= =========
Earnings per common and
common equivalent share $ 2.20 $ 1.02
========= =========
Cash dividends declared per
common share $ 0.05 $ 0.04
========= =========
Weighted average common
and common equivalent shares
outstanding 900 880
========= =========
</TABLE>
See Notes to Consolidated Condensed Financial Statements.
<PAGE> 3
PART I - (continued)
Item 1. Financial Statements (continued)
<TABLE>
Intel Corporation
Consolidated Condensed Balance Sheets March 29, Dec. 28,
(in millions) 1997 1996
-------- --------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,824 $ 4,165
Short-term investments 4,529 3,742
Trading assets 146 87
Accounts receivable, net 3,984 3,723
Inventories:
Raw materials 290 280
Work in process 708 672
Finished goods 375 341
-------- --------
1,373 1,293
-------- --------
Deferred tax assets 581 570
Other current assets 144 104
Total current assets 14,581 13,684
-------- --------
Property, plant and equipment 14,902 14,262
Less accumulated depreciation (6,170) (5,775)
Property, plant and equipment, net 8,732 8,487
Long-term investments 1,473 1,353
Other assets 316 211
-------- --------
TOTAL ASSETS $25,102 $23,735
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 713 $ 389
Accounts payable 1,044 969
Deferred income on shipments to distributors 513 474
Accrued compensation and benefits 721 1,128
Accrued advertising 446 410
Other accrued liabilities 618 507
Income taxes payable 1,446 986
-------- --------
Total current liabilities 5,501 4,863
-------- --------
Long-term debt 481 728
Deferred tax liabilities 995 997
Put warrants 1,017 275
Stockholders' equity:
Preferred stock -- --
Common stock and capital in excess
of par value 2,996 2,897
Retained earnings 14,112 13,975
-------- --------
Total stockholders' equity 17,108 16,872
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $25,102 $23,735
======== ========
</TABLE>
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)
<TABLE>
Three Months Ended
------------------
March 29, March 30,
1997 1996
---- ----
<S> <C> <C>
Cash flows provided by (used for)
operating activities:
Net income $ 1,983 $ 894
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation 521 411
Net loss on retirements of property,
plant and equipment 23 28
Deferred taxes 33 48
Changes in assets and liabilities:
Accounts receivable (261) 15
Inventories (80) 460
Trading assets (59) (75)
Accounts payable 75 (103)
Accrued compensation and benefits (407) (301)
Income taxes payable 460 120
Tax benefit from employee stock plans 51 18
Other assets and liabilities (117) 70
------- -------
Total adjustments 239 691
------- -------
Net cash provided by operating activities 2,222 1,585
------- -------
Cash flows provided by (used for)
investing activities:
Additions to property, plant and equipment (789) (832)
Purchases of available-for-sale investments (2,263) (544)
Sales of available-for-sale investments 75 --
Maturities and other changes in
available-for-sale investments 1,292 359
------- -------
Net cash (used for) investing activities (1,685) (1,017)
Cash flows provided by (used for)
financing activities:
Increase in short-term debt, net 24 80
Additions to long-term debt 68 --
Proceeds from sales of shares through employee
stock plans and other 137 91
Proceeds from exercise of 1998 Step-Up Warrants 22 2
Proceeds from sales of put warrants 88 18
Repurchase and retirement of common stock (1,176) (234)
Payment of dividends to stockholders (41) (33)
------- -------
Net cash (used for) financing activities (878) (76)
------- -------
Net (decrease) increase in cash
and cash equivalents $ (341) $ 492
======= =======
Supplemental disclosures of
cash flow information:
Cash paid during the period for:
Interest $ 8 $ 9
Income taxes $ 548 $ 286
</TABLE>
Certain 1996 amounts have been reclassified to conform to the 1997 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 28, 1996. 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 28, 1996.
2. Interest income and other includes (in millions):
<TABLE>
Three Months Ended
------------------
March 29, March 30,
1997 1997
-------- --------
<S> <C> <C>
Interest income $127 $ 80
Foreign currency gains 13 7
Other income (expense), net 75 (11)
-------- --------
Total $215 $ 76
======== ========
</TABLE>
Other income for the three months ended March 29, 1997 consists
primarily of gains on sales of equity investments.
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.
Effective December 27, 1997, the Company will adopt Statement of
Financial Accounting Standards No. 128, "Earnings per Share." At
that time, the Company will be required to change the method currently
used to calculate earnings per share and to restate all prior periods.
The new requirements will include a calculation of basic earnings per
share, from which the dilutive effect of stock options and warrants will
be excluded. The basic earnings per share are expected to reflect an
increase of $.22 and $.07 per share for the quarters ended March 29,
1997 and March 30, 1996, respectively, over the primary earnings per
share reported for these quarters. A calculation of diluted earnings
per share will also be required; however, this is not expected to
differ materially from the primary earnings per share of $2.20 and
$1.02 reported for the quarters ended March 29, 1997 and March 30, 1996,
respectively.
4. At March 29, 1997, a $300 million reverse repurchase arrangement
originally payable in 2001 was reclassified from long-term debt to
short-term as it is expected to be redeemed or repaid within the next
year. In March 1997, the Company borrowed a total of 44 million Irish
punts (approximate U.S. dollar equivalent of $68 million) due 2000-2017
at interest rates ranging from 5% to 7%. The borrowings were made
in connection with the financing of a factory in Ireland, and Intel
has invested the proceeds in Irish punt denominated instruments of
similar maturity to hedge foreign currency and interest rate exposures.
5. During the first quarter of 1997, the Company repurchased 7.7 million
shares of Common Stock under the Company's authorized repurchase program
at a cost of $1.2 billion. During the quarter, the Company's Board of
Directors approved an increase in the repurchase program of up to 30
million additional shares, bringing the total authorization to 140
million shares. As of March 29, 1997, after allowing for the outstanding
put warrants, approximately 39.9 million shares remained available under
the repurchase program. (See Item 2. Management's Discussion and
Analysis for subsequent activity.)
<PAGE> 6
PART I - (continued)
Item 1. Financial Statements (continued)
Intel Corporation, Notes to Consolidated Condensed Financial Statements
(continued)
6. In a series of private placements during the 1991-1997 period, the
Company sold put warrants that entitle the holder of each warrant to
sell to the Company, by physical delivery, one share of Common Stock
at a specified price. Activity during the first quarter of 1997 is
summarized as follows:
<TABLE>
Put Warrants Outstanding
------------------------
Cumulative Premium Number Potential
(In millions) Received Of Warrants Obligation
- --------------------------------------------------------------------------
<S> <C> <C> <C>
December 28, 1996 $ 335 4.5 $ 275
Sales 88 6.0 916
Expirations -- (3.0) (174)
----- ----- ------
March 29, 1997 $ 423 7.5 $1,017
===== ===== ======
</TABLE>
The 6 million warrants were sold to banks and investment banks during
January and February of 1997. They expire on various dates between
October 1997 and February 1998 and have exercise prices ranging from
$147 to $162 per share, with an average exercise price of $153.
The 7.5 million put warrants outstanding on March 29, 1997 expire on
various dates between April 1997 and February 1998 and have exercise
prices ranging from $66 to $162 per share, with an average exercise
price of $136. The amount related to the Company's potential buyback
obligation has been reclassified from Stockholders' Equity and
recorded as put warrants. 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.)
7. On January 13, 1997, the Board of Directors of the Company approved a
two-for-one stock split to be effected as a special stock distribution
of one share of Common Stock for each share of the Company's Common
Stock outstanding, subject to stockholder approval of an increase
in authorized shares at the Company's Annual Meeting on May 21, 1997.
Because the proposed stock split cannot be effected until there is an
increase in authorized shares, none of the share, per share, Common
Stock, capital in excess of par value or warrant amounts herein has
been restated to reflect the effect of this split.
8. Digital Equipment Corporation (DEC) publicly announced on May 13, 1997
that it had filed a lawsuit in U.S. District Court, District of
Massachusetts, charging Intel with willful infringement of ten DEC
patents in making, using and selling microprocessor products, including
Intel's Pentium(R) and Pentium(R) Pro (including Pentium(R) II)
microprocessor families. In a press release, DEC alleged that Intel's
patent infringement has caused DEC economic injury and, if not stopped,
would cause irreparable harm. DEC stated that it is seeking both an
injunction and monetary damages, including triple damages for Intel's
willful violation of the patents, and that injunction would prohibit
Intel from using DEC's patented technology in its present and future
microprocessor products.
Intel intends to closely review and to vigorously defend against
this lawsuit. Intel was only made aware of this lawsuit as a
result of the publication of the DEC press release on May 13, 1997.
The Company has had no opportunity to review the allegations of the
complaint or to make any assessment as to Intel's defenses or the
materiality of any financial impact of the lawsuit in the event that
Intel is unsuccessful in defending against such action.
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations - First Quarter of 1997 Compared to First Quarter of
- --------------------------------------------------------------------------
1996
- ----
Revenues for Q1 1997 increased by 39% compared to Q1 1996. Higher volumes
of Pentium(R) processors, including processors with MMX(TM) media
enhancement technology (collectively the "Pentium processor family"), and
Pentium(R) Pro processors, as well as a shift in mix toward higher
performance processors, drove the overall growth in revenues. Chipsets also
showed significant revenue growth between these periods.
Cost of sales declined by 5% from Q1 1996 to Q1 1997, due to shifts in
product mix and factory efficiencies due to increased volume. Costs for Q1 of
1996 also included unusually high inventory reserves, including reserves
related to inventories of certain purchased components. Gross margin
increased from 48% in Q1 1996 to 64% in Q1 1997 due to the more favorable
product mix and the reduced costs discussed above.
For Q1 1997 and Q1 1996, a majority of the Company's revenues, and a
substantial majority of its gross margin, were derived from sales of
Pentium processor family products, including related board-level products.
Sales of Pentium Pro processors and related board-level products
represented a significant portion of the Company's revenues and gross margin
for the first quarter of 1997.
Research and development expenses and marketing, general and
administrative expenses rose by a total of $356 million, or 39%, from Q1
1996 to Q1 1997, primarily due to higher levels of research and
development spending on process and product technology, and higher
merchandising, Intel Inside(R) program and profit dependent expenses.
Expenses were 20% of revenues in Q1 of 1997, the same as Q1 1996.
Interest and other income for Q1 1997 increased by $139 million over the
prior year due primarily to higher average investment balances and gains on
sales of equity investments.
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 of underlying assets, liabilities and other obligations. Gains and
losses on these instruments are generally offset by those on the
underlying hedged transactions; as a result, there was no material net
impact on the Company's financial results in either Q1 1997 or Q1 1996.
The provision for taxes increased by $610 million, or 127%, primarily due to
the increase in pretax income in Q1 of 1997. The effective tax rate
increased slightly from 35% for Q1 1996 to 35.5% for Q1 1997.
Financial Condition
- -------------------
The Company's financial condition remains very strong. As of March 29,
1997, cash, trading assets and short- and long-term investments totaled $10
billion, up from $9.3 billion at December 28, 1996. The Company's other
sources of liquidity include credit lines, which are generally uncommitted,
and authorized commercial paper borrowings together totaling approximately
$1.8 billion. The Company also maintains the authority to issue an
aggregate of approximately $1.4 billion in debt, equity and other
securities under Securities and Exchange Commission shelf registration
statements.
The Company funded most of its investment needs during the first quarter of
1997 with cash generated from operations, which totaled $2.2 billion. Major
uses of cash during the first quarter of 1997 included capital spending of
$789 million for property, plant and equipment, primarily for
microprocessor manufacturing capacity, and $1.2 billion to buy back 7.7
million shares of Common Stock.
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Financial Condition (continued)
The Company's five largest customers accounted for approximately 35% of
net revenues for the three month period ended March 29, 1997. At March 29,
1997, these customers accounted for approximately 27% of net accounts
receivable.
Key financing activities in the first quarter of 1997 included the repurchase
of 7.7 million shares of Common Stock for $1.2 billion as part of the
Company's authorized stock repurchase program. The Company also sold 6
million put warrants, receiving proceeds of $88 million, while 3
million previously outstanding put warrants expired unexercised. From the
end of the first quarter of 1997 through May 5, 1997, the Company
repurchased 6.5 million shares of its Common Stock at a cost of $945
million, issued 4.5 million put warrants, receiving premiums of $53
million, and 1.5 million put warrants expired unexercised. As of May 5,
1997, Intel had the potential obligation to repurchase 10.5 million shares
of Common Stock at an aggregate cost of $1.6 billion under outstanding put
warrants. The exercise price of these outstanding warrants ranged from
$143 to $162 per share, with an average exercise price of $149 per share.
During the first quarter of 1997, the Company's Board of Directors
approved an increase of up to 30 million additional shares in the
Company's repurchase program. This increase brings the total authorization
to 140 million shares. As of May 5, 1997, 30.4 million shares
remained available for repurchase under the repurchase authorization,
after allowing for the 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
- -------
The outlook section contains a number of forward-looking statements, all
of which are based on current expectations. Actual results may differ
materially.
The Company expects revenue for the second quarter of 1997 to be flat
to slightly up from the first quarter revenue of $6.4 billion. Revenue is
partly a function of the mix of microprocessors and related motherboards and
the mix of microprocessor types and speeds, all of which are difficult to
forecast. Because of the large price difference between types of
microprocessors, this mix affects the average price Intel will realize and
has a large impact on Intel's revenues. In addition, the Company expects
to continue to reduce microprocessor prices systematically, focused on
moving higher performance products into the mainstream.
Intel's strategy has been, and continues to be, to introduce ever-
higher performance microprocessors. To implement this strategy, the Company
plans to cultivate new businesses and continue to 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 introduced the Pentium processor
with MMX media enhancement technology during the first quarter of 1997
and, in May 1997, announced the Pentium(R) II processor which combines the
advanced technologies of the Pentium Pro processor with MMX technology.
The Company has expanded manufacturing capacity over the last few years and
continues to expand capacity based on the assumed continued success of this
strategy.
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Outlook (continued)
The Company expects the gross margin percentage in the second quarter of 1997
to be flat to slightly down from 64% in the first quarter. Intel's gross
margin expectation for 1997 is 60 percent plus or minus a few points. Based
on the first quarter results and current expectations, the gross margin
percentage for 1997 is expected to be at the mid to high part of that range.
The Company's goal continues to be to grow gross margin dollars, and the
Company still believes that over the long-term, the gross margin percentage
will be 50 percent plus or minus a few points. Intel's gross margin
percentage in any period varies depending on the mix of types of
microprocessors sold. The percentage also varies depending on the mix of
microprocessors and related motherboards within a product family.
Motherboards generally have lower margins than microprocessors, with the
percentage of motherboards sold typically being higher early in the product
cycle and decreasing as the product matures. In addition, the Company's
newest product, the Pentium II, will be packaged with purchased components in
a Single Edge Contact cartridge, which over time tends to increase absolute
dollar margins but to lower the gross margin percentage. Various other
factors, including unit volumes and costs, yield issues associated with
production at factories, 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.
To implement its strategy, Intel continues to build capacity to produce
high-performance microprocessors and other products. The Company currently
expects capital expenditures for 1997 to be approximately $4.5 billion. This
spending plan is dependent upon expectations regarding manufacturing
efficiencies, delivery times of various machines and construction
schedules for new facilities. Depreciation for 1997 is still expected to
be approximately $2.5 billion.
Spending on research and development and marketing, general and
administrative expenses in the second quarter of 1997 is expected to be
approximately 7 to 9 percent higher than the $1.3 billion in the first
quarter of 1997. Expense projections for the second quarter of 1997
incorporate salary increases and expected higher spending for merchandising
and research and development and are subject to changes in revenue and profit
dependent expenses.
All microprocessors have errata. (Errata are design defects or errors which
may cause a product to deviate from published specifications.) Intel's
standard practice since 1995 has been that when a new erratum is identified,
the Company works with computer makers and software vendors to understand
the issue and evaluate potential fixes, e.g., workarounds. After the
erratum is understood, the Company publishes the erratum so that consumers
can make their purchasing decisions based upon available information.
The Company's future results of operations and the other forward-
looking statements contained in this outlook, in particular the statements
regarding revenues, pricing, gross margin, capital spending, depreciation,
research and development, and marketing and general and administrative
expenses, 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 computing industry and in the 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 response to price pressures; unanticipated
costs or other adverse effects associated with processors and other
products containing errata; 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 and
their implementation, including the manufacturing ramp; timing of new
strategic product and process development efforts; shortage of
manufacturing capacity; risks associated with foreign operations; 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 and profits are all influenced by a number of
factors, as discussed above, all of which are inherently difficult to
forecast.
<PAGE> 10
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
A. Litigation
Digital Equipment Corporation (DEC) publicly announced on May 13, 1997 that
it had filed a lawsuit in U.S. District Court, District of Massachusetts,
charging Intel with willful infringement of ten DEC patents in making, using
and selling microprocessor products, including Intel's Pentium(R) and
Pentium(R) Pro (including Pentium(R) II) microprocessor families. In a
press release, DEC alleged that Intel's patent infringement has caused DEC
economic injury and, if not stopped, would cause irreparable harm. DEC
stated that it is seeking both an injunction and monetary damages, including
triple damages for Intel's willful violation of the patents, and that
injunction would prohibit Intel from using DEC's patented technology in its
present and future microprocessor products.
Intel intends to closely review and to vigorously defend against this
lawsuit. ntel was only made aware of this lawsuit as a result of the
publication of the DEC press release on May 13, 1997. The Company has had
no opportunity to review the allegations of the complaint or to make any
assessment as to Intel's defenses or the materiality of any financial impact
of the lawsuit in the event that Intel is unsuccessful in defending against
such action.
Item 2. Changes in Securities
Unregistered sales of equity securities.
Reference is made to the information on sales of put warrants appearing in
Note 6 under the heading "Intel Corporation, Notes to Consolidated Condensed
Financial Statements" in Part I, Item 1 hereof. All such transactions are
exempt from registration under Section 4 (2) of the Securities Act of 1933.
Each transaction was privately negotiated and each offeree and purchaser was
an accredited investor/qualified institutional buyer. No public offering or
public solicitation was used by the registrant in the placement of these
securities.
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 March 29, 1997.
<PAGE> 11
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: May 13, 1997 By: /s/ Andy D. Bryant
------------------------
Andy D. Bryant
Vice President, Chief Financial
Officer and Principal Accounting
and Financial Officer
Exhibit 11.1
INTEL CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(In millions, except per share amounts)
<TABLE>
Three Months Ended
------------------
March 29, March 30,
1997 1996
-------- ---------
<S> <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 819 822
Add shares issuable from assumed exercise
of options and warrants 81 58
------ ------
Weighted average number of shares
outstanding as adjusted 900 880
====== ======
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 819 822
Add shares issuable from assumed
exercise of options and warrants 81 58
------ ------
Weighted average number of shares
outstanding as adjusted 900 880
====== ======
NET INCOME $1,983 $ 894
====== ======
PRIMARY EARNINGS PER SHARE $ 2.20 $ 1.02
====== ======
FULLY DILUTED EARNINGS PER SHARE<F1> $ 2.20 $ 1.02
====== ======
<FN>
<F1>
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.
</FN>
</TABLE>
Exhibit 12.1
INTEL CORPORATION
STATEMENT SETTING FORTH THE COMPUTATION
OF RATIOS OF EARNINGS TO FIXED CHARGES
(in millions)
<TABLE>
Three Months Ended
March 29, March 30,
1997 1996
----------------------
<S> <C> <C>
Income before taxes $ 3,075 $ 1,376
Add fixed charges net of
capitalized interest 11 7
-------- --------
Income before taxes and fixed
charges (net of capitalized
interest) $ 3,086 $ 1,383
======== ========
Fixed charges:
Interest $ 7 $ 5
Capitalized interest 3 9
Estimated interest component
of rental expense 4 2
-------- --------
Total $ 14 $ 16
======== ========
Ratio of earnings before taxes and
fixed charges, to fixed charges 220 86
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from Intel Corporation's
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND CONSOLIDATED CONDENSED BALANCE
SHEETS and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-END> MAR-29-1997
<CASH> 3824
<SECURITIES> 4675
<RECEIVABLES> 3984<F3>
<ALLOWANCES> 0
<INVENTORY> 1373
<CURRENT-ASSETS> 14581
<PP&E> 14902
<DEPRECIATION> 6170
<TOTAL-ASSETS> 25102
<CURRENT-LIABILITIES> 5501
<BONDS> 481
1017<F1>
0
<COMMON> 2996
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 25102
<SALES> 6448
<TOTAL-REVENUES> 6448
<CGS> 2307
<TOTAL-COSTS> 2307
<OTHER-EXPENSES> 581<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7
<INCOME-PRETAX> 3075
<INCOME-TAX> 1092
<INCOME-CONTINUING> 1983
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1983
<EPS-PRIMARY> 2.20
<EPS-DILUTED> 0<F4>
<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.
<F4>Item not reported because immaterially different from primary
EPS.
</FN>
</TABLE>
