Barclays Capital Global Technology Conference 2010 - Intel

Barclays Capital Global Technology Conference 2010


Paul S. Otellini President and Chief Executive Officer


Intel’s Best Year Ever Earnings Per Share

$2.00

$1.50

$1.00

$0.50

$0.00

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010 *

*Forecast based on analyst consensus


PCs More Affordable Worldwide Weeks of Average Income to Buy Average Priced Consumer Notebook PC

Brazil

China

E. Europe N. Amer. W. Europe Worldwide

1995

36.6

174.7

47.7

4.9

5.6

25.5

2000

46.9

111.8

59.5

2.7

5.5

20.1

2005

24.1

30.6

15.8

1.5

2.3

9.9

2010

5.7

7.2

4.9

0.8

1.0

4.3

2015

2.1

2.5

1.7

0.4

0.5

2.1

Source: Intel estimates

Driven by Rising Incomes and Falling Prices Barclays Capital Global Technology Conference 2010

Large Opportunity for PC Growth Installed Base of PCs per Household North America

Western Europe Eastern Europe Latin America China

2015 2010

Worldwide 0

0.5

1

1.5

Source: Intel estimates


2

PCs Lead in Desirability Holiday CE WISH LIST RANK 2008

2009

2010

1

Notebook / Laptop PC Notebook / Laptop PC

Notebook / Laptop PC

2

TV

Portable MP3

iPad

3

Mobile Phone

Flat Panel TV

EReader

4

Portable MP3

Video Game System

iPod / iPod Touch

5

Video Game System

Digital Camera

Video Game System

Base random national sample of 1,000 U.S. adults Source: CEA


“Right off the bat Sandy Bridge is killer...”


Sandy Bridge –

2nd Generation Intel® Core™ Processors:

A Huge Leap Forward Media Processing

Stereoscopic 3D Blu-Ray

Intel® Clear Video HD Technology

Intel® Wireless Display

Intel® HD Graphics

Intel® Advanced Vector Extensions


Smart TV and Embedded Business Growth

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


Intel Atom Tablet Designs in 2011

*

Microsoft Windows

Google Android

MeeGo

Over 35 Design Wins and Counting *Forecast


Deep Engagements in

Smartphones


Architectural Contests Take Time 1980s: PCs

UNITS

100%

UNITS

100%

Atari ST Amiga

Other Proprietary

1990s: Data Centers

100%

80%

Vector

Power

Other RISC (IBM)

Mac

80%

2000s: HPCs

UNITS

80%

Commodore 64

Itanium

RISC

60%

SPARC

60%

60%

VIC 20

AMD x86-64

Apple II

40% VIC 20

40%

40%

Intel x86

20%

Intel x86-32

Other CISC (IBM)

20%

Intel x86-64

20%

Intel x86-32

0%

0% ‘80

Volumes

X

‘82

‘84

‘86

‘88

0%

‘90

‘90

21X

X

‘92

‘94

‘96

‘98

‘00

‘00

15X

X

‘02

‘04

‘06

Source: IDC, Gartner, Intel estimates


‘08

3X

Intel Gaining Traction in

New Segments

Control Processors for Networking Applications

Storage System Processors

2003

2004

2005

2006

2007

2008

2009

Other

Other

Intel

Intel

2010 *

2003

2004

2005

2006

2007

2008

2009

2010 *

Source: Intel estimates *Forecast


Intel’s Unique Assets Best Silicon Process Technology

Consistent Architecture Large Ecosystem

Global Scale


22nm: A Breakthrough in Silicon Process Technology 2007

2009

45nm

32nm

2011*

22nm

High-k / Metal Gate: 3+ yrs ahead of competition 1st Gen

2nd Gen

3rd Gen

New Innovations *Forecast


Looking Forward • Intel is lean, efficient, and highly profitable • Increasingly differentiated and unique from any other company • Continue strong growth in the PC market segment • Scaling in new segments • Our goal is to have double digit revenue CAGR and EPS CAGR over the next few years *

*Forecast


Returning Cash to Shareholders Dividends per Share

$ 0.80 0.70

• $3.5 B of dividends paid in 2010

0.60 0.50

• 32% dividend CAGR from 2003 • Dividend Yield = 3.3%*^

0.40

0.30 0.20 0.10 0.00

2003 2004 2005 2006 2007 2008 2009 2010 2011*

*2011 annualized figure for dividend is an Intel forecast based on the rate of 18.1125 cents per quarter approved by the Board of Directors in November 2010; all dividends are subject to actual declaration by the Board of Directors in the future ^ represents $21.69 Intel stock price close on 12/3/2010 Source: Intel


Stock Buyback Has Resumed


Risk Factors The above statements and any others in this document that refer to plans and expectations for the fourth quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. 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 the important factors that could cause actual results to differ materially from the corporation’s expectations. Demand could be different from Intel's expectations due to factors including changes in business and economic conditions; customer acceptance of Intel’s and competitors’ products; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers. Intel operates in intensely competitive industries that are characterized by a high percentage of costs that are fixed or difficult to reduce in the short term and product demand that is highly variable and difficult to forecast. Revenue and the gross margin percentage are affected by the timing of Intel product introductions and the demand for and market acceptance of Intel's products; actions taken by Intel's competitors, including product offerings and introductions, marketing programs and pricing pressures and Intel’s response to such actions; defects or disruptions in the supply of materials or resources; and Intel’s ability to respond quickly to technological developments and to incorporate new features into its products. The gross margin percentage could vary significantly from expectations based on changes in revenue levels; product mix and pricing; start-up costs; variations in inventory valuation, including variations related to the timing of qualifying products for sale; excess or obsolete inventory; manufacturing yields; changes in unit costs; impairments of long-lived assets, including manufacturing, assembly/test and intangible assets; the timing and execution of the manufacturing ramp and associated costs; and capacity utilization. Expenses, particularly certain marketing and compensation expenses, as well as restructuring and asset impairment charges, vary depending on the level of demand for Intel's products and the level of revenue and profits. The tax rate expectation is based on current tax law and current expected income. The tax rate 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 tax 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, change in the fair value or impairments of debt and equity investments; interest rates; cash balances; and changes in fair value of derivative instruments. The majority of Intel’s non-marketable equity investment portfolio balance is concentrated in companies in the flash memory market segment, and declines in this market segment or changes in management’s plans with respect to Intel’s investments in this market segment could result in significant impairment charges, impacting restructuring charges as well as gains/losses on equity investments and interest and other. Intel's results could be impacted 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. Intel’s results could be affected by the timing of closing of acquisitions and divestitures. Intel's results could be affected by adverse effects associated with product defects and errata (deviations from published specifications), and by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust and other issues, such as the litigation and regulatory matters described in Intel's SEC reports. An unfavorable ruling could include monetary damages or an injunction prohibiting us 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. A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the report on Form 10-Q for the quarter ended September 25, 2010.

Barclays Capital Global Technology Conference 2010 Rev. 11/2/10
