Intel 1995 Annual Report Download - page 21

contractual agreements to hedge certain investment positions and debt (see "Derivative financial instruments") are recorded as net interest
income or expense on a monthly basis. Interest expense capitalized as a component of construction costs was $46 million, $27 million and $8
million for 1995, 1994 and 1993, respectively.
Earnings per common and common equivalent share. Earnings per common and common equivalent share are computed using the weighted
average number of outstanding common and dilutive common equivalent shares outstanding. Fully diluted earnings per share have not been
presented as part of the consolidated statements of income because the differences are insignificant.
Stock distribution. On June 16, 1995, the Company effected a stock distribution in the form of a two-for-one stock split to stockholders of
record as of May 19, 1995. Share, per share, Common Stock, capital in excess of par value, stock option and warrant amounts herein have been
restated to reflect the effect of this split.
Common Stock
1998 Step-Up Warrants. In 1993, the Company issued 40 million 1998 Step-Up Warrants to purchase 40 million shares of Common Stock.
This transaction resulted in an increase of $287 million in Common Stock and capital in excess of par value, representing net proceeds from the
offering. The Warrants became exercisable in May 1993 at an effective price of $35.75 per share of Common Stock, subject to annual increases
to a maximum price of $41.75 per share effective in March 1997. As of December 30, 1995, approximately 40 million Warrants were
exercisable at a price of $38.75 and expire on March 14, 1998 if not previously exercised. For 1995, the Warrants had a dilutive effect on
earnings per share and represented approximately 11 million common equivalent shares. The Warrants did not have a dilutive effect on
earnings per share in 1994 or 1993.
Stock repurchase program. In 1990, the Board of Directors authorized the repurchase of up to 80 million shares of Intel's Common Stock in
open market or negotiated transactions. The Board increased this authorization to a maximum of 110 million shares in July 1994. As of
December 30, 1995, the Company had repurchased and retired approximately 68 million shares for the program to date at a cost of $2.19
billion. As of December 30, 1995, after reserving shares to cover outstanding put warrants, 29.9 million shares remained available under the
repurchase authorization.
Put warrants
In a series of private placements from 1991 through 1995, the Company sold put warrants that entitle the holder of each warrant to sell one
share of Common Stock to the Company at a specified price. Activity during the past three years is summarized as follows:
The amount related to Intel's potential repurchase obligation has been reclassified from stockholders' equity to put warrants. The 12 million put
warrants outstanding at December 30, 1995 expire on various dates between February 1996 and November 1996 and have exercise prices
ranging from $38 to $68 per share, with an average exercise price of $60 per share. There is no significant dilutive effect on earnings per share
for the periods presented. Borrowings
Short-term debt. Short-term debt and weighted average interest rates at fiscal year-ends were as follows:
Put warrants
outstanding
Cumulative ---------------------------
premium Number of Potential
(In millions) received warrants obligation
- ----------------------------------------------------------------------------
December 26, 1992 $ 56 28.0 $373
Sales 62 21.6 561
Expirations -- (20.0) (246)
------ ------ ------
December 25, 1993 118 29.6 688
Sales 76 25.0 744
Exercises -- (2.0) (65)
Expirations -- (27.6) (623)
------ ------ ------
December 31, 1994 194 25.0 744
Sales 85 17.5 925
Repurchases -- (5.5) (201)
Expirations -- (25.0) (743)
------ ------ ------
December 30, 1995 $279 12.0 $725
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1995 1994
----------------------- -----------------------
Weighted Weighted
average average
(In millions) Balance interest rate Balance interest rate
- -----------------------------------------------------------------------------
Borrowed under
lines of credit $ 57 3.2% $ 68 3.2%
Reverse repurchase
agreements payable
in non-U.S. currencies 124 9.2% 99 8.0%
Notes payable 2 4.7% 5 4.7%
Short-term portion
of long-term debt -- -- 179 11.8%
Drafts payable 163 N/A 166 N/A
------ ------
Total $ 346 $ 517
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