Intel Announces Record Revenue of $9.96 Billion; EPS of 32 Cents Includes Legal Settlement that Lowered EPS by Approximately 2 Cents


-- Gains or losses from equity securities and interest and other could vary from expectations depending on equity market levels and volatility; gains or losses realized on the sale or exchange of securities; impairment charges related to marketable, non-marketable and other investments; interest rates; cash balances; and changes in fair value of derivative instruments.

-- Intel's results could be impacted by unexpected economic, social and political conditions in the countries in which Intel, its customers or its suppliers operate, including security risks, possible infrastructure disruptions and fluctuations in foreign currency exchange rates.

-- Intel's results could also 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.

Intel, the world's largest chip maker, is also a leading manufacturer of computer, networking and communications products. Additional information about Intel is available at www.intel.com/pressroom.

* Intel, Intel Xeon, Itanium, Intel Centrino, XScale, Intel Viiv and Oplus are marks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries.

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

(1) Performance based on result submitted to www.spec.org on SPECint_rate_base2000 benchmark. Baseline system configuration: IBM eServer xSeries 346 Server platform with two 64-bit Intel Xeon processors 3.60 GHz with 2MB L2 Cache, 800 MHz system bus, 8x512MB ECC PC2-3200 DIMMs for RAM, Microsoft Windows Server 2003 Standard Edition for OS and Intel Compiler 8.1 binaries. For more information see www.spec.org/cpu2000/results/res2005q2/cpu2000-20050514-04113.html. New configuration: IBM eServer xSeries 346 Server platform with two Dual-Core Intel Xeon processors 2.80 GHz with 2x2MB L2 Cache, 800 MHz system bus, 4 GB DDR2, Microsoft Windows Server 2003 Standard Edition, Intel C/C++ Compiler 9.0 for 32-bit applications, Intel Fortran Compiler 9.0 (20050624Z) for 32-bit applications, Microsoft Visual Studio .NET, MicroQuill Smartheap Library 7.30. For additional information on other applications tested and benchmark results see http://www.intel.com/performance/server/xeon/index.htm. Results vary by hardware and software configuration.

                           INTEL CORPORATION
              CONSOLIDATED SUMMARY INCOME STATEMENT DATA
                (In millions, except per share amounts)



                                    Three Months      Nine Months
                                        Ended            Ended
                                   --------------- -----------------
                                  Oct. 1, Sept. 25, Oct. 1, Sept.25,
                                    2005    2004     2005     2004
                                   ------- ------- -------- --------
NET REVENUE                        $9,960  $8,471  $28,625  $24,611
Cost of sales                       4,012   3,752   11,876   10,242
                                   ------- ------- -------- --------
GROSS MARGIN                        5,948   4,719   16,749   14,369
                                   ------- ------- -------- --------

Research and development            1,341   1,183    3,783    3,564
Marketing, general and 
 administrative                     1,478   1,123    4,082    3,434
Amortization of 
 acquisition-related
 intangibles and costs                 29      40      103      141
                                   ------- ------- -------- --------
OPERATING EXPENSES                  2,848   2,346    7,968    7,139
                                   ------- ------- -------- --------
OPERATING INCOME                    3,100   2,373    8,781    7,230
Gains (losses) on equity 
 securities, net                       (2)    (10)     (20)       1
Interest and other, net               145      63      387      159
                                   ------- ------- -------- --------
INCOME BEFORE TAXES                 3,243   2,426    9,148    7,390
Income taxes                        1,248     520    2,937    1,997
                                   ------- ------- -------- --------
NET INCOME                         $1,995  $1,906  $ 6,211  $ 5,393
                                                                 =======  =======  ========  ========

BASIC  EARNINGS  PER  SHARE                      $  0.33    $  0.30    $    1.01    $    0.84
                                                                      =======  =======  ========  ========
DILUTED  EARNINGS  PER  SHARE                  $  0.32    $  0.30    $    1.00    $    0.82
                                                                      =======  =======  ========  ========

COMMON  SHARES  OUTSTANDING                      6,062      6,375        6,139        6,435
COMMON  SHARES  ASSUMING  DILUTION          6,144      6,442        6,211        6,541


                                                    INTEL  CORPORATION
                              CONSOLIDATED  SUMMARY  BALANCE  SHEET  DATA
                                                        (In  millions)



                                                                                        Oct.  1,    July  2,    Dec.  25,
                                                                                            2005          2005          2004
                                                                                        --------  --------  --------
CURRENT  ASSETS
Cash  and  short-term  investments                          $11,951    $12,600    $14,061
Trading  assets                                                                1,982        2,224        3,111
Accounts  receivable                                                      3,748        3,448        2,999
Inventories:
    Raw  materials                                                                  381            384            388
    Work  in  process                                                          1,434        1,506        1,418
    Finished  goods                                                            1,000            849            815
                                                                                        --------  --------  --------
                                                                                            2,815        2,739        2,621
Deferred  tax  assets  and  other                                  1,228        1,179        1,266
                                                                                        --------  --------  --------
    Total  current  assets                                              21,724      22,190      24,058

Property,  plant  and  equipment,  net                      16,825      16,624      15,768
Marketable  strategic  equity  securities                    520            362            656
Other  long-term  investments                                      3,047        2,247        2,563
Goodwill                                                                            3,814        3,805        3,719
Other  assets                                                                    1,430        1,285        1,379
                                                                                        --------  --------  --------

    TOTAL  ASSETS                                                            $47,360    $46,513    $48,143
                                                                                        ========  ========  ========

CURRENT  LIABILITIES
Short-term  debt                                                          $      252    $      318    $      201
Accounts  payable  and  accrued  liabilities            6,654        5,425        6,050
Deferred  income  on  shipments  to
    distributors                                                                    692            707            592
Income  taxes  payable                                                    1,901        1,330        1,163
                                                                                        --------  --------  --------
    Total  current  liabilities                                      9,499        7,780        8,006

LONG-TERM  DEBT                                                                    432            430            703
DEFERRED  TAX  LIABILITIES                                                753            689            855

STOCKHOLDERS'  EQUITY                                                  36,676      37,614      38,579
                                                                                        --------  --------  --------

    TOTAL  LIABILITIES  AND
        STOCKHOLDERS'  EQUITY                                        $47,360    $46,513    $48,143
                                                                                        ========  ========  ========


                                                    INTEL  CORPORATION
                          SUPPLEMENTAL  FINANCIAL  AND  OTHER  INFORMATION
                                                        (In  millions)



                                                                                        Q3  2005    Q2  2005    Q3  2004
                                                                                      ---------------------------
GEOGRAPHIC  REVENUE:
      Asia-Pacific                                                            $5,124      $4,679      $4,014
                                                                                                  52%            51%            48%
      Americas                                                                    $1,903      $1,863      $1,799
                                                                                                  19%            20%            21%
      Europe                                                                        $2,007      $1,809      $1,886
                                                                                                  20%            20%            22%
      Japan                                                                              $926          $880          $772
                                                                                                    9%              9%              9%

CASH  INVESTMENTS:
Cash  and  short-term  investments                          $11,951    $12,600    $13,647
Trading  assets  -  fixed  income  (1)                          1,632        1,883        2,192
                                                                                      ---------------------------
Total  cash  investments                                            $13,583    $14,483    $15,839

INTEL  CAPITAL  PORTFOLIO:
Marketable  strategic  equity  securities                  $520          $362          $461
Other  strategic  investments                                          553            518            631
                                                                                      ---------------------------
Total  Intel  Capital  portfolio                                $1,073          $880      $1,092

TRADING  ASSETS:
Trading  assets  -  equity  securities
      offsetting  deferred  compensation  (2)                $350          $341          $318
Total  trading  assets  -  sum  of  1+2                        $1,982      $2,224      $2,510

SELECTED  CASH  FLOW  INFORMATION:
Depreciation                                                                  $1,055      $1,051      $1,155
Amortization  of  acquisition-related
  intangibles  &  costs                                                        $29            $36            $40
Capital  spending                                                        ($1,282)  ($1,389)  ($1,106)
Stock  repurchase  program                                        ($2,500)  ($2,500)  ($2,500)
Proceeds  from  sales  of  shares  to
      employees,  tax  benefit  &  other                            $444          $387          $322
Dividends  paid                                                                ($486)      ($493)      ($253)
Net  cash  used  for  acquisitions                                  ($22)        ($81)        ($20)

SHARE  INFORMATION:
Average  common  shares  outstanding                          6,062        6,144        6,375
Dilutive  effect  of  stock  options                                  82              71              67
Common  shares  assuming  dilution                              6,144        6,215        6,442

STOCK  BUYBACK:
      Shares  repurchased                                                    93.6          98.9        106.3
      Shares  authorized  for  buyback                        2,800.0    2,800.0    2,300.0
      Cumulative  shares  repurchased                      (2,486.9)(2,393.3)(2,097.5)
      Shares  available  for  buyback                              313.1        406.7        202.5

OTHER  INFORMATION:
Employees  (in  thousands)                                              96.0          91.0          84.2



                                                    INTEL  CORPORATION
                SUPPLEMENTAL  OPERATING  RESULTS  AND  OTHER  INFORMATION
                                                      ($  in  millions)



                                                                                                              Nine  Months
                                                                                                                      Ended
                                                                                                            --------------
                                                                          Q3        Q2        Q3        Q3          Q3
OPERATING  SEGMENT  INFORMATION:              2005    2005    2004    2005      2004
--------------------------------------------------------------------

Digital  Enterprise  Group
      Microprocessor  revenue                      4,936  4,603  4,520  14,483  14,170
      Chipset,  motherboard  and  other
        revenue                                                  1,434  1,398  1,346    4,249    3,835
      Net  revenue                                            6,370  6,001  5,866  18,732  18,005
      Operating  income                                  2,162  2,008  1,808    6,550    6,401

--------------------------------------------------------------------
Mobility  Group
      Microprocessor  revenue                      2,331  2,056  1,571    6,304    3,957
      Flash  memory  revenue                              572      528      638    1,678    1,642
      Chipset  and  other  revenue                    640      566      352    1,722        890
      Net  revenue                                            3,543  3,150  2,561    9,704    6,489
      Operating  income                                  1,402  1,140      796    3,641    1,790

--------------------------------------------------------------------
All  Other
      Net  revenue                                                  47        80        44        189        117
      Operating  loss                                        (464)  (499)  (231)(1,410)    (961)

--------------------------------------------------------------------
Total
      Net  revenue                                            9,960  9,231  8,471  28,625  24,611
      Operating  income                                  3,100  2,649  2,373    8,781    7,230

--------------------------------------------------------------------

During  the  first  quarter  of  2005,  the  company  reorganized  its  business
groups  to  bring  all  major  product  groups  in  line  with  the  company's
strategy  to  design  and  deliver  technology  platforms.  These  new
business  units  include  the  Digital  Enterprise  Group,  the  Mobility
Group,  the  Digital  Home  Group,  the  Digital  Health  Group  and  the
Channel  Platforms  Group.  The  Digital  Enterprise  Group  and  the  Mobility
group  are  reportable  operating  segments.  The  Digital  Home  Group,
Digital  Health  Group  and  Channel  Platforms  Group  operating  segments  do
not  meet  the  quantitative  thresholds  for  reportable  segments  as
defined  by  SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise
and  Related  Information."  Therefore,  these  operating  segments  are
included  within  the  "all  other"  category.  All  prior  period  amounts
have  been  adjusted  retrospectively  to  reflect  the  new  organizational
structure  as  well  as  certain  minor  reorganizations  effected  through
the  third  quarter  of  2005.  As  a  result  of  this  platform
reorganization,  further  changes  may  occur  in  the  future.

The  Digital  Enterprise  Group  operating  segment's  products  include
microprocessors  and  related  chipsets  and  motherboards  designed  for  the
desktop  (including  consumer  desktop)  and  enterprise  computing  market
segments,  communications  infrastructure  components  such  as  network
processors  and  embedded  microprocessors,  wired  connectivity  devices
and  products  for  network  and  server  storage.  The  Mobility  Group
operating  segment's  products  include  microprocessors  and  related
chipsets  designed  for  the  mobile  computing  market  segment,  flash
memory,  wireless  connectivity  products,  application  processors  used  in
cellular  handsets  and  handheld  computing  devices,  and  cellular
baseband  chipsets.  Revenue  for  the  "all  other"  category  primarily
consists  of  microprocessors  and  related  chipsets  used  in  consumer
electronics  devices.  For  further  information  on  the  business  strategy
of  each  operating  segment,  see  Intel's  Quarterly  Report  on  Form  10-Q
for  the  quarter  ended  July  2,  2005.

In  October  2005,  Intel  entered  into  a  legal  settlement  agreement  with
MicroUnity,  Inc.  and  recorded  an  estimated  $140  million  charge  to
third-quarter  results.  Of  this  amount,  $110  million  reduced  the
operating  income  of  the  Digital  Enterprise  Group,  and  $30  million
reduced  the  operating  income  of  the  Mobility  Group.

In  addition  to  the  operating  results  for  the  Digital  Home  Group,
Digital  Health  Group  and  Channel  Platforms  Group  operating  segments,
the  "all  other"  category  also  includes  acquisition-related  costs,
including  amortization  and  any  impairments  of  acquisition-related
intangibles  and  goodwill.  Additionally,  "all  other"  includes  the
results  of  operations  of  seed  businesses  that  support  the  company's
initiatives.  Finally,  "all  other"  includes  certain  corporate-level
operating  expenses,  including  a  portion  of  profit-dependent  bonus  and
other  expenses  not  allocated  to  the  operating  segments.



                                                    INTEL  CORPORATION
                          RECONCILIATION  OF  NON-GAAP  FINANCIAL  MEASURE
                        GROSS  MARGIN  EXCLUDING  LEGAL  SETTLEMENT  CHARGE
                                                      ($  in  millions)

                                                                                                                        Q3  2005
                                                                                                                    ------------
GAAP  gross  margin                                                                                  $5,948  59.7%
Legal  settlement  charge(1)                                                                    $140    1.4%
                                                                                                                    ------------
Gross  margin,  excluding
  legal  settlement  charge                                                                    $6,088  61.1%
                                                                                                                    ============

(1)  Subsequent  to  the  end  of  the  third  quarter  of  2005,  Intel  and
MicroUnity,  Inc.  entered  into  a  settlement  agreement  which  resolves
all  of  the  issues  in  a  patent  infringement  case  and  provides  certain
rights  for  Intel  customers.  Under  the  agreement,  Intel  will  pay  $300
million  to  MicroUnity.  In  connection  with  the  settlement  agreement,
Intel  recorded  an  estimated  $140  million  charge  to  third  quarter  cost
of  sales.

 


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