Intel : Earnings Release FY 2021

Intel Corporation

2200 Mission College Blvd.

Santa Clara, CA 95054-1549

News Release

Intel Reports Fourth-Quarter and Full-Year 2021 Financial Results

Delivers Record Quarterly and Full-Year Revenue

News Summary

• Fourth-quarterGAAP revenue was $20.5 billion, exceeding October guidance by $1.3 billion and up 3 percent year-over-year (YoY). Fourth-quarternon-GAAP revenue was $19.5 billion, exceeding October guidance by $1.2 billion. Full-year GAAP revenue set an all-time Intel record of $79.0 billion, up 1 percent YoY.
• Delivered GAAP fourth-quarter earnings per share (EPS) of $1.13, exceeding October guidance by 35 cents. Fourth-quarternon-GAAP EPS was $1.09, exceeding October guidance by 19 cents.
• In 2021, Intel generated $30.0 billion of cash from operations and $11.3 billion of free cash flow (FCF).
• Forecasting first-quarter 2022 revenue of approximately $18.3 billion; expecting first-quarter EPS of $0.70 (non- GAAP EPS of $0.80).
• Announces five percent increase to quarterly cash dividend.

SANTA CLARA, Calif., January 26, 2022 -- Intel Corporation today reported fourth-quarter and full-year 2021 financial results. The company also announced that its board of directors approved a cash dividend increase of five percent to $1.46 per share on an annual basis. The board declared a quarterly dividend of $0.365 per share on the company's common stock, which will be payable on March 1 to shareholders of record as of February 7.

"Q4 represented a great finish to a great year. We exceeded top-line quarterly guidance by over $1 billion and delivered the best quarterly and full-year revenue in the company's history," said Pat Gelsinger, Intel CEO. "Our disciplined focus on execution across technology development, manufacturing, and our traditional and emerging businesses is reflected in our results. We remain committed to driving long-term, sustainable growth as we relentlessly execute our IDM 2.0 strategy."

Q4 2021 Financial Highlights

		GAAP				Non-GAAP
	Q4 2021	Q4 2020	vs. Q4 2020		Q4 2021	Q4 2020	vs. Q4 2020
Revenue ($B)	$20.5	$20.0	up 3%	$19.5	$18.9	up 4%
Gross margin	53.6%	56.8%	down 3.2 ppt	55.4%	60.0%	down 4.6 ppt
R&D and MG&A ($B)	$6.0	$5.4	up 11%	$5.8	$5.2	up 11%
Operating margin	24.3%	29.5%	down 5.1 ppt	25.9%	32.4%	down 6.6 ppt
Tax rate	11.0%	21.8%	down 10.8 ppt	11.7%	21.7%	down 10 ppt
Net income ($B)	$4.6	$5.9	down 21%	$4.5	$6.1	down 27%
Earnings per share	$1.13	$1.42	down 21%	$1.09	$1.48	down 26%

In the fourth quarter, the company generated $5.8 billion in cash from operations and paid dividends of $1.4 billion.

Note: Year-over-yearnon-GAAP comparisons also exclude the NAND memory business from 2020 results. Full reconciliations between GAAP and non-GAAP measures are provided below.

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Full-Year 2021 Financial Highlights

		GAAP				Non-GAAP
	2021	2020	vs. 2020		2021	2020	vs. 2020
Revenue ($B)	$79.0	$77.9	up 1%	$74.7	$72.9	up 2%
Gross margin	55.4%	56.0%	down 0.5 ppt	57.7%	59.4%	down 1.7 ppt
R&D and MG&A ($B)	$21.7	$19.7	up 10%	$20.9	$18.9	up 10%
Operating margin	24.6%	30.4%	down 5.8 ppt	29.7%	33.4%	down 3.7 ppt
Tax rate	8.5%	16.7%	down 8.2 ppt	9.1%	16.6%	down 7.5 ppt
Net income ($B)	$19.9	$20.9	down 5%	$22.4	$21.6	up 4%
Earnings per share	$4.86	$4.94	down 2%	$5.47	$5.10	up 7%

For the full year, the company generated $30.0 billion of cash from operations, paid dividends of $5.6 billion, and used $2.4 billion to repurchase 39.5 million shares of stock.

Business Unit Summary

Key Business Unit Revenue and Trends		Q4 2021		vs. Q4 2020	2021		vs. 2020
CCG		$10.1 billion		down	7%		$40.5 billion		up 1%
DCG		$7.3 billion		up	20%		$25.8 billion		down 1%
Internet of Things
IOTG		$1.1 billion		up	36%		$4.0 billion		up 33%
Mobileye		$356 million		up	7%		$1.4 billion		up 43%
NSG		$1.0 billion		down	18%		$4.3 billion		down 20%
PSG		$484 million		up	15%		$1.9 billion		up 4%

Fourth-quarter revenue was led by an all-time record quarter for our Data Center Group (DCG), with strong server recovery in enterprise and government. The Internet of Things Group (IoTG) had a record quarter, reflecting strong demand on recovery from COVID-19impacts. The Client Computing Group (CCG) delivered another $10 billion quarter, proving that PCs are more essential than ever.

Note: Year-over-yearnon-GAAP comparisons also exclude the NAND memory business from 2020 results. Full reconciliations between GAAP and non-GAAP measures are provided below.

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Business Highlights

• Appointed David Zinsner as Executive Vice President and Chief Financial Officer, and announced that Executive Vice President Michelle Johnston Holthaus will lead Intel's Client Computing Group.
• Announced plans to take Mobileye public in the United States in mid-2022 via an initial public offering of newly issued Mobileye stock.
• Completed the first closing of the sale of our NAND memory business to SK hynix, Inc.
• Announced initial investment of more than $20 billion to build two new leading-edge chip factories in Ohio, where we are establishing the first advanced semiconductor campus in the "Silicon Heartland" of the Midwest. This will be Intel's first new manufacturing site location in 40 years.
• Launched the 12th Gen Intel® Core™ processor family, including the all-new 12th Gen Intel Core H-series mobile processors led by the Intel Core i9-12900HK, the fastest mobile processor ever created.1 The 12th Gen Intel Core family will include 60 processors and more than 500 designs.
• Announced that Habana Labs' Gaudi AI Accelerators power Amazon EC2 DL1 Instances.
• Unveiled key packaging, transistor and quantum physics breakthroughs fundamental to advancing and accelerating computing well into the next decade and outlined its path toward more than 10x interconnect density improvement in packaging with hybrid bonding and 30% to 50% area improvement in transistor scaling.
• Began shipping Intel® Arc™ discrete graphics products (code-named "Alchemist") to OEM/ODM customers, with more than 50 design wins.
• Released the oneAPI 2022 toolkits to expand features to provide developers greater utility and architectural choice to accelerate computing.
• Introduced Mobileye updates, including the new EyeQ Ultra purpose-builtSoC for autonomous vehicles, plansto deliver what is expected to be the world's first level 4 autonomous vehicle for consumers with Geely's Zeekr brand in 2024, and collaboration with Volkswagen Group and Ford to apply Mobileye's mapping technology in driver assistance systems.
• Ranked #2 on JUST Capital's 2022 "Just 100" list, which reflects the performance of America's largest publicly traded companies on the issues that matter most in defining just business behavior today.

Additional information regarding Intel's results can be found in the Q4'21 Earnings Presentation available at: www.intc.com.

1See www.intel.com/PerformanceIndex for more information, including workload and configuration details. Performance results are based on testing as of dates shown in configurations and may not reflect all publicly available updates. Performance varies by use, configuration, and other factors. Results may vary.

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Business Outlook

Intel's guidance for the first quarter includes both GAAP and non-GAAP estimates. Reconciliations between GAAP and non-GAAP financial measures are included below. Our first-quarter business outlook includes an additional week in the first quarter due to 2022 being a 53-week year.

Q1 2022		GAAP		Non-GAAP
		Approximately		Approximately
Revenue		$18.3 billion		$18.3 billion^
Gross Margin	49%	52%
Tax rate	25%	15%
Earnings per share	$0.70	$0.80

Actual results may differ materially from Intel's Business Outlook as a result of, among other things, the factors described under "Forward-Looking Statements" below.

Earnings Webcast

Intel will hold a public webcast at 2 p.m. PST today to discuss the results for its fourth quarter of 2021. The live public webcast can be accessed on Intel's Investor Relations website at www.intc.com. The Q4'21 Earnings Presentation, webcast replay, and audio download will also be available on the site.

Intel plans to report its earnings for the first quarter of 2022 on April 28, 2022 promptly after close of market; related materials will be available at www.intc.com. A public webcast of Intel's earnings conference call will follow at 2 p.m. PDT at www.intc.com.

Investor Meeting

Intel's Investor Meeting will take place on February 17, 2022, where the company will provide additional information regarding its full-year and long-term outlook and plans. More information about Intel's Investor Meeting can be found at www.intc.com.

^ No adjustment on a non-GAAP basis.

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Forward-Looking Statements

Intel's Business Outlook and other statements in this release that refer to future plans and expectations are forward- looking statements that involve a number of risks and uncertainties. Words such as "anticipates," "expects," "intends," "goals," "plans," "guidance," "believes," "seeks," "estimates," "continues," "committed," "may," "will," "would," "should," "could," "accelerate," "deliver," "path," "progress," "forecast," "future," and "positioned," and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on estimates, forecasts, projections, uncertain events or assumptions, including statements relating to Intel's strategy; manufacturing expansion and investment plans, including Intel's planned Ohio investments; supply expectations, including regarding industry shortages; pending transactions; the proposed Mobileye initial public offering (IPO); total addressable market (TAM) and market opportunity; business plans and financial expectations; future macroeconomic conditions; future legislation; future impacts of the COVID-19 pandemic; future products, technology, and services, and the expected availability and benefits of such products, technology, and services; expectations regarding customers; projections regarding competitors; and anticipated trends in our businesses or the markets relevant to them, including with respect to future demand and industry growth, also identify forward-looking statements. All forward-looking statements included in this release are based on management's expectations as of the date of this release and, except as required by law, Intel disclaims any obligation to update these forward-looking statements to reflect future events or circumstances. Forward- looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Intel presently considers the following to be among the important factors that can cause actual results to differ materially from the company's expectations.

• Demand for Intel's products is highly variable and can differ from expectations due to factors including changes in business and economic conditions; customer confidence or income levels, and the levels of customer capital spending; the introduction, availability, and market acceptance of Intel's products, products used together with Intel products, and competitors' products; competitive and pricing pressures, including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer order patterns and order cancellations; changes in customer needs and emerging technology trends; and changes in the level of inventory and computing capacity at customers.
• Intel's results can 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, including as a result of ongoing industry shortages of components and substrates; product manufacturing quality/yields; and changes in capital requirements and investment plans. Variations in results can also be caused by the timing of Intel product introductions and related expenses, including marketing programs, and Intel's ability to respond quickly to technological developments and to introduce new products or incorporate new features into existing products, as well as decisions to exit product lines or businesses, which can result in restructuring and asset impairment charges.
• Intel's results can be affected by adverse economic, social, political, regulatory, and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including recession or slowing growth, military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns (including the COVID-19 pandemic), inflation, fluctuations in currency exchange rates, sanctions and tariffs, political disputes, changes in government grants and incentives, and continuing uncertainty regarding social, political, immigration, and tax and trade policies in the U.S. and abroad. Results can also be affected by the formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, including changes or uncertainty related to the U.S. government entity list and changes in the ability to obtain export licenses, which can be changed without prior notice.