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: April 19, 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))
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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 quarter ended
April 1, 2006 and forward-looking statements relating to 2006 and the
second quarter of 2006 as presented in a press release of April 19,
2006. 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extent that such information is superseded by information as of a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
company's earnings release contains non-GAAP financial measures that
exclude the effects of share-based compensation and the requirements
of SFAS No. 123(R), "Share-based Payment" ("123R"). The non-GAAP
financial measures used by management and disclosed by the company
exclude the income statement effects of all forms 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 applied the modified prospective method of adoption of
123R, under which the effects of 123R are reflected in the company's
GAAP financial statement presentations for and after the first quarter
2006, but are not 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 reviews these financial
measures calculated without taking into account the effects of the new
requirements under 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.
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. Segment
managers are not held accountable for share-based compensation charges
impacting their business unit's operating income (loss) and
accordingly share-based compensation charges have been excluded from
the company's measure of segment profitability (operating income).
Therefore, the review of segment results by management and the Board
of Directors excludes share-based compensation.
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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.
Profit-dependent cash incentive pay to employees, including senior
management, also is calculated using formulae that incorporate the
company's annual results (operating income and/or EPS) excluding
share-based compensation expense. For example, for 2006 the executive
compensation cash incentive plan formula measures EPS as the greater
of (x) Intel's operating income or (y) Intel's net income divided by
Intel's weighted average diluted common shares outstanding, in both
cases excluding the effects of share-based compensation.
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 takes
into consideration 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."
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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: April 19, 2006 By: /s/ Andy D. Bryant
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Andy D. Bryant
Executive Vice President,
Chief Financial Officer and
Principal Accounting Officer
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