Expense for Legal Settlement with AMD to Be Taken in Q4
NEWS HIGHLIGHTS
* Legal settlement to result in Q4 expense of $1.25 billion.
* Spending (R&D plus MG&A) now expected to be approximately $4.2 billion.
* Tax rate expected to decline to about 20 percent.
SANTA CLARA, Calif.--(Business Wire)--
As a result of the legal settlement announced today with Advanced Micro Devices
(AMD), Intel Corporation adjusted its fourth-quarter financial expectations to
reflect the impact of the $1.25 billion settlement payment. Intel now expects
spending (R&D plus MG&A) in the fourth quarter to be approximately $4.2 billion,
up from $2.9 billion. In addition, the effective tax rate is expected to be
approximately 20 percent, down from 26 percent. All other expectations are
unchanged.
Under terms of the agreement, the parties will end all outstanding litigation
including antitrust and patent cross license disputes. AMD will withdraw all of
its regulatory complaints against Intel worldwide and both parties will enter
into a new 5-year patent cross license agreement. In addition, Intel will pay
AMD $1.25 billion.
Intel`s fourth-quarter Business Outlook was originally published in the
company`s third- quarter earnings release, available at www.intc.com. The
company is scheduled to report its fourth-quarter financial results on Jan. 14.
Status of Business Outlook
Through Nov. 25, Intel`s corporate representatives may reiterate the Business
Outlook during private meetings with investors, investment analysts, media and
others. From the close of business on Nov. 25 until publication of the company`s
fourth-quarter earnings release, Intel will observe a "Quiet Period" during
which the Business Outlook disclosed in the company`s news releases and filings
with the SEC should be considered to be historical, speaking as of prior to the
Quiet Period only and not subject to an update by the company.
Risk Factors
The above statements and any others in this document 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.
Additionally, Intel is in the process of transitioning to its next generation of
products on 32nm process technology, and there could be execution issues
associated with these changes, including product defects and errata along with
lower than anticipated manufacturing yields. Revenue and the gross margin
percentage are affected by the timing of new 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; 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; capacity utilization; start-up costs, including
costs associated with the new 32nm process technology; variations in inventory
valuation, including variations related to the timing of qualifying products for
sale; excess or obsolete inventory; product mix and pricing; manufacturing
yields; changes in unit costs; impairments of long-lived assets, including
manufacturing, assembly/test and intangible assets; and the timing and execution
of the manufacturing ramp and associated costs.
* 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 realized on the sale or exchange of
securities; gains or losses from equity method investments; impairment charges
related to debt securities as well as equity and other investments; interest
rates; cash balances; and changes in fair value of derivative instruments.
* The majority of our 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 our
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 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.
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 fiscal quarter ended Sept. 26 2009.
Intel (NASDAQ:INTC), the world leader in silicon innovation, develops
technologies, products and initiatives to continually advance how people work
and live. Additional information about Intel is available at
www.intel.com/pressroom and blogs.intel.com.
Intel and the Intel logo are trademarks of Intel Corporation in the United
States and other countries.
* Other names and brands may be claimed as the property of others.
Intel
Tom Beermann, 408-765-6855
Media Relations
tom.beermann@intel.com
Rueben Gallegos, 408-765-5374
Investor Relations
rueben.m.gallegos@intel.com
Copyright Business Wire 2009
