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 17, 2006
(Date of earliest event reported)
INTEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-06217 94-1672743
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(State of (Commission (IRS Employer
incorporation) File Number) Identification No.)
2200 Mission College Blvd., Santa Clara, California 95054-1549
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(Address of principal executive offices) (Zip Code)
(408) 765-8080
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(Registrant's telephone number, including area code)
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:
[ ] 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
fourth quarter and fiscal year ended December 31, 2005 and
forward-looking statements relating to 2006 and the first
quarter of 2006 as presented in a press release of January 17,
2006.
Also included in Exhibit 99.1 under the heading "Supplemental
Operating Segment Results and Other Information" is certain
unaudited annual and quarterly financial information for the
company's operating segments, presented on a basis that
reflects the revised operating segments of the company
effective as of the fourth quarter of 2005. The Flash Memory
Group, which had previously been part of the Mobility Group,
became a separate operating segment in the fourth quarter. The
historical financial information presented under the new
organizational structure does not in any way restate or revise
the financial position, results of operations or cash flows of
Intel Corporation as set forth in any previously reported
consolidated balance sheet, consolidated statement of income
or consolidated statement of cash flows of the company. This
information is provided as supplemental financial information
that may be of interest to Intel Corporation stockholders.
The information in this report shall be deemed incorporated by
reference into any registration statement heretofore or
hereafter filed under the Securities Act of 1933, as amended,
except to the extent that such information is superseded by
information as of a subsequent date that is included in or
incorporated by reference into such registration statement.
The information in this report shall not be treated as filed
for purposes of the Securities Exchange Act of 1934, as
amended.
In addition to disclosing financial results calculated in
accordance with U.S. generally accepted accounting principles
(GAAP), the Business Outlook statements in the company's
earnings release contain non-GAAP financial measures that
exclude the effects of share-based compensation expense and
the requirements of SFAS No. 123(R), "Share-based Payment"
("123R"). Commencing with its first quarter 2006 earnings
release, the company's earnings releases will include non-GAAP
financial measures of its financial results for the reporting
period that exclude the income statement effects of
share-based compensation and the effects of 123R upon the
number of diluted shares used in calculating non-GAAP earnings
per share. The non-GAAP financial measures disclosed by the
company should not be considered a substitute for or superior
to financial measures calculated in accordance with GAAP, and
the financial results calculated in accordance with GAAP and
reconciliations to those financial statements should be
carefully evaluated. The non-GAAP financial measures used by
the company may be calculated differently from, and therefore
may not be comparable to, similarly titled measures used by
other companies. The company has provided reconciliations of
the non-GAAP financial measures to the most directly
comparable GAAP financial measures.
The company will apply the modified prospective method of
adoption of 123R, under which the effects of 123R will be
reflected in the company's GAAP financial statement
presentations for and after the first quarter 2006, but will
not be reflected in results for prior periods. Gross margin,
expenses (research and development and marketing, general and
administrative), operating income, income taxes, net income
and earnings per share (EPS) are the primary financial
measures management uses for planning and forecasting future
periods that are affected by shared-based compensation.
Because management will continue to review these financial
measures calculated without taking into account the effects of
the new requirements under 123R, upon implementation of 123R
these financial measures are treated as "non-GAAP financial
measures" under Securities and Exchange Commission rules.
Management uses the non-GAAP financial measures for internal
managerial purposes, including as a means to compare
period-to-period results on both a segment basis and
consolidated basis and as a means to evaluate the company's
results on a consolidated basis compared to those of other
companies. In addition, management uses certain of these
measures when publicly providing forward-looking statements on
expectations regarding future consolidated basis financial
results as in the document attached to this Form 8-K.
The company's share-based compensation programs are
established and managed on a corporate-wide basis, including
specification of grant types and amount ranges for employees
by category and grade. Following implementation of 123R,
segment managers will not be held accountable for share-based
compensation charges impacting their business unit's operating
income (loss) and accordingly share-based compensation charges
will be excluded from the company's measure of segment
profitability (operating income). Therefore, the review of
segment results by management and the Board of Directors will
exclude share-based compensation.
Additionally, management and the Board of Directors will
continue to compare the company's historical consolidated
results of operations (revenue, gross margin, research and
development, marketing, general and administrative expenses,
operating income as well as net income and EPS), excluding
stock-based compensation, to financial information prepared on
the same basis during the company's budget and planning
process, to assess the business and to compare consolidated
results to the objectives identified for the company. The
company's budget and planning process commences with a
segment-level evaluation - which, as noted above, excludes
share-based compensation - and culminates with the preparation
of a consolidated annual and/or quarterly budget that includes
these non-GAAP financial measures (gross margin, research and
development expenses, marketing, general and administrative
expenses, operating income, income tax expense, net income and
EPS). This budget, once finalized and approved, serves as the
basis for allocation of resources and management of
operations. While share-based compensation is a significant
expense affecting the company's results of operations,
management excludes share-based compensation from the
company's consolidated budget and planning process to
facilitate period to period comparisons and to assess changes
in gross margin dollar, net income and earnings per share
targets in relation to changes in forecast revenue.
The company discloses this information to the public to enable
investors who wish to more easily assess the company's
performance on the same basis applied by management and to
ease comparison on both a GAAP and non-GAAP basis among other
companies, that separately identify share-based compensation
expenses. In particular, as the company begins to apply 123R,
the company believes that it is useful to investors to
understand how the expenses and other adjustments associated
with the application of 123R are being reflected on the
company's income statements.
Although these non-GAAP financial measures adjust expense
and diluted share items to exclude the accounting treatment
of share-based compensation, they should not be viewed as a
pro-forma presentation reflecting the elimination of the
underlying share-based compensation programs, as those
programs are an important element of the company's
compensation structure and generally accepted accounting
principles indicate that all forms of share-based payments
should be valued and included as appropriate in results of
operations. Management compensates for this aspect of the
non-GAAP financial measures by evaluating the dilutive
effect of the company's share-based compensation
arrangements on the company's basic and diluted earnings per
share calculations and by reviewing other quantitative and
qualitative information regarding the company's share-based
compensation arrangements, including the information
provided in the Management's Discussion and Analysis section
of the company's quarterly and annual financial reports
under the caption "Employee Equity Incentive Plans."
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 17, 2006 By: /s/ Andy D. Bryant
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Andy D. Bryant
Executive Vice President,
Chief Financial Officer and
Principal Accounting Officer