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INTEL CORP
FORM 10-K
(Annual Report)
Filed 03/13/01 for the Period Ending 12/30/00
Address 2200 MISSION COLLEGE BLVD
RNB-4-151
SANTA CLARA, CA 95054
Telephone 4087658080
CIK 0000050863
Symbol INTC
SIC Code 3674 - Semiconductors and Related Devices
Industry Semiconductors
Sector Technology
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2008, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    ... the Period Ending 12/30/00 Address 2200 MISSION COLLEGE BLVD RNB-4-151 SANTA CLARA, CA 95054 4087658080 0000050863 INTC 3674 - Semiconductors and Related Devices Semiconductors Technology 12/31 Telephone CIK Symbol SIC Code Industry Sector Fiscal Year http://www.edgar-online.com © Copyright 2008...

  • Page 2
    ... or organization) 94-1672743 (I.R.S. Employer Identification No.) 2200 Mission College Boulevard, Santa Clara, California, 95052-8119 (Address of Principal Executive Offices, Zip Code) Registrant's telephone number, including area code (408) 765-8080 Securities registered pursuant to Section 12...

  • Page 3
    ... building or enhancing Internet data centers or providing e-Commerce services to their customers or clients. We are organized into five operating segments according to our various product lines: the Intel Architecture Group, the Wireless Communications and Computing Group, the Network Communications...

  • Page 4
    ... at the Intel® Internet site (www.intc.com/intel/annual00/). However, all data referred to also appears in the electronic version. 1 Intel Architecture Group The Intel Architecture Group (IAG) develops platform solutions around our microprocessors and chipsets for all major computing segments...

  • Page 5
    ... 2000, we announced e-Business enabling solutions designed to further enhance the acceptance and deployment of Intel Architecture-based systems. These services will be deployed through our Intel Solution Centers and include hardware, software, lab testing equipment and engineering services that Web...

  • Page 6
    ...In August 2000, we introduced the Intel® XScale™ micro-architecture, a new chip architecture designed to be used in a wide variety of advanced handheld devices, wireless Internet devices and networking infrastructure applications. Building on Intel® StrongARM technology which we license from ARM...

  • Page 7
    ..., audio, video, image and voice signals in battery-powered communications applications. Other wireless technologies. In September 2000, we introduced a new platform architecture designed to accelerate the development of next-generation Internet applications for wireless devices. The Intel® Personal...

  • Page 8
    ... 2011 LAN Access Point, which functions as a wireless hub to the mobile PC cards, connecting the wired network and the wireless devices. These wireless devices are the first products resulting from the joint development agreement announced in February 2000 between Intel and Symbol Technologies, Inc...

  • Page 9
    ... in new market segments, including businesses based on the Internet and the PC. The group currently offers Web hosting, e-Commerce data center services and connected peripherals. In 2000, Intel Online Services, Inc. opened seven data centers in the United States, Europe, India, Japan, Korea...

  • Page 10
    ... customers of our acquired companies. Compaq Computer Corporation and Dell Computer Corporation each contributed approximately 13% to our total sales in 2000. A substantial majority of the sales to these two customers consisted of Intel Architecture Group products. No other customer accounted...

  • Page 11
    ... Group operating segment supports initiatives to deliver the system-level communications products directed at service providers running e-Business data centers. The Communications Products Group focuses on selling its Intel NetStructure products to OEM customers. The Communications Products Group...

  • Page 12
    ...various locations, including Israel, Denmark and Malaysia. We also maintain research and development facilities dedicated to improving manufacturing processes in Arizona, California and Oregon. In 2000, we shipped thousands of prototype processors based on the IA-64 architecture for high-end servers...

  • Page 13
    ... program with OEMs to identify with the Intel Inside® logo certain personal computers containing genuine Intel microprocessors. We maintain certain details about our processes, products and strategies as trade secrets. Like many companies in the semiconductor and other high-technology industries...

  • Page 14
    ... and administrative offices. 167,000 Sales and marketing and administrative offices. 80,000 Sales and marketing and administrative offices. 8 Ireland 12 Malaysia (A) 11 Israel (B) 6 Philippines (C) 3 Costa Rica 5 Puerto Rico 1 People's Republic of China (D) 1 United Kingdom 3 Japan 1 Germany

  • Page 15
    ... April 2000, Intergraph appealed this ruling. Intergraph's state law claims remain at issue in the trial court. The company disputes Intergraph's claims and intends to defend the lawsuit vigorously. B. ENVIRONMENTAL PROCEEDINGS We have been named to the California and U.S. Superfund lists for three...

  • Page 16
    ... Report to Stockholders is incorporated by reference. In January 2001, we announced that we entered into a definitive agreement to acquire Xircom, Inc and in March we successfully completed the tender offer. Xircom is a supplier of PC cards and other products used to connect mobile computing devices...

  • Page 17
    ... Intel at December 30, 2000 and December 25, 1999, and for each of the three years in the period ended December 30, 2000 and the Report of Independent Auditors thereon, and the company's unaudited quarterly financial data for the two-year period ended December 30, 2000 are incorporated by reference...

  • Page 18
    ... exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this annual report. Reports on Form 8-K On October 20, 2000, Intel filed a report on Form 8-K relating to financial information for Intel Corporation for the quarter ended September 30, 2000 and...

  • Page 19
    ... the pages listed in the above index and the portions of such report referred to in Items 1, 5, 6, 7, 7A and 8 of this Form 10-K, the 2000 Annual Report to Stockholders is not to be deemed filed as part of this report. 23 INTEL CORPORATION SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS December 26...

  • Page 20
    ... 1988 Executive Long-Term Stock Option Plan as amended and restated, effective July 16, 1997 (incorporated by reference to Exhibit 10.2 of Registrant's Form 10-Q for the quarter ended June 27, 1998 as filed on August 11, 1998). 10.3* Intel Corporation Executive Officer Bonus Plan as amended and...

  • Page 21
    ... 12, 2001 26 Exhibit 12 INTEL CORPORATION STATEMENT SETTING FORTH THE COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES FOR INTEL CORPORATION (In millions, except ratios) Years Ended Dec. 28, 1996 Dec. 27, 1997 Dec. 26, 1998 Dec. 25, 1999 Dec. 30, 2000 Income before taxes Add-Fixed charges net of...

  • Page 22
    ... at year-end (in thousands) Net investment in property, plant & equipment Additions to property, plant & equipment†Weighted average diluted shares outstanding (In millions-except employees and per share amounts) Total assets Long-term debt & put warrants Stockholders' equity Dividends...

  • Page 23
    ... cash equivalents Short-term investments Trading assets Accounts receivable, net of allowance for doubtful accounts of $84 ($67 in 1999) Inventories Deferred tax assets Other current assets Total current assets Property, plant and equipment: Land and buildings Machinery and equipment Construction in...

  • Page 24
    ... Gain on assets contributed to Convera Net loss on retirements of property, plant and equipment Deferred taxes Changes in assets and liabilities: Accounts receivable Inventories Accounts payable Accrued compensation and benefits Income taxes payable Tax benefit from employee stock plans Other assets...

  • Page 25
    ... Components of comprehensive income: Net income Change in unrealized gain on available-forsale investments, net of tax Total comprehensive income Proceeds from sales of shares through employee stock plans, tax benefit of $415 and other Proceeds from exercise of 1998 step-up warrants Proceeds from...

  • Page 26
    ...from sales of shares through employee stock plans, tax benefit of $506 and other Proceeds from sales of put warrants Reclassification of put warrant obligation, net Repurchase and retirement of common stock Issuance of common stock and assumption of stock options in connection with acquisitions Cash...

  • Page 27
    ... cost on a current average or first-in, first-out basis). Inventories at fiscal year-ends were as follows: (In millions) 2000 1999 Raw materials Work in process Finished goods Total $ 384 1,057 800 2,241 $ 183 755 540 1,478 $ $ Property, plant and equipment Property, plant and equipment are...

  • Page 28
    ... of return on merchandise unsold by the distributors. Because of frequent sales price reductions and rapid technological obsolescence in the industry, Intel defers recognition of revenues on shipments to distributors until the distributors sell the merchandise. Management believes that the company...

  • Page 29
    ..., from the Board of Directors to repurchase up to 1.5 billion shares of Intel's common stock in open market or negotiated transactions. During 2000, the company repurchased 73.5 million shares of common stock at a cost of $4.0 billion. As of December 30, 2000, the company had repurchased and retired...

  • Page 30
    ... Intel common stock. During 1999, the company assumed the notes with a principal amount of $115 million as a result of the Level One Communications, Inc. acquisition (see "Acquisitions"). The value assigned to the notes was approximately $212 million, based upon the assumed conversion price...

  • Page 31
    ... sales totaled $3.4 billion, $883 million and $185 million, respectively, and the company realized $52 million in gross losses on sales in 2000. In 2000, the company recognized gains of $682 million on shares valued at $866 million exchanged in third-party merger transactions. In 2000, the company...

  • Page 32
    ... debt securities Swaps hedging debt 6.71% 5.40% 6.68% 6.86% 6.75% 5.67% 0.7 years 0.7 years 2.8 years 0-2 years 0-2 years 2-3 years Note: Pay and receive rates are based on the reset rates that were in effect at December 30, 2000. Other foreign currency instruments Intel transacts business in...

  • Page 33
    ...$ In December 2000, Intel and Excalibur Technologies Corporation formed a new company, Convera Corporation. Intel contributed its Interactive Media Services division and invested $150 million in cash in exchange for 14.9 million voting and 12.2 million non-voting shares of Convera. Intel recognized...

  • Page 34
    ... Foreign: Current Deferred 454 473 (65) 408 Total provision for taxes Effective tax rate $ 4,606 30.4% $ 3,914 34.9% $ 3,069 33.6% The tax benefit associated with dispositions from employee stock plans reduced taxes currently payable for 2000 by $887 million ($506 million and $415 million...

  • Page 35
    ...per share. Years after 1998 are open to examination by the IRS. Management believes that adequate amounts of tax and related interest and penalties, if any, have been provided for any adjustments that may result for these years. Employee benefit plans Stock option plans Intel has a stock option plan...

  • Page 36
    ...specific dates through December 2010. Option exercise prices for options exercised during the three-year period ended December 30, 2000 ranged from $0.08 to $49.81. Stock participation plan Under this plan, eligible employees may purchase shares of Intel's common stock at 85% of fair market value at...

  • Page 37
    ... of eligible employees in the U.S. and Puerto Rico. Each plan provides for minimum pension benefits that are determined by a participant's years of service, final average compensation (taking into account the participant's social security wage base) and the value of the company's contributions, plus...

  • Page 38
    ... communications products, including chipsets, reference designs, software and other key technologies for lightweight wireless handsets. 1998 In January 1998, the company acquired Chips and Technologies, Inc. Chips and Technologies was a supplier of graphics accelerator chips for mobile computing...

  • Page 39
    ... other" category for segment reporting purposes. The operating results of Chips and Technologies have been included in the Intel Architecture Group operating segment. The unaudited pro forma information below assumes that companies acquired in 2000 and 1999 had been acquired at the beginning of 1999...

  • Page 40
    ... $748 million, before consideration of any cash acquired. In addition, Intel will assume existing employee options. Xircom is a supplier of PC cards and other products used to connect mobile computing devices to corporate networks and the Internet. The completion of this transaction is subject to...

  • Page 41
    ...-line operating segments: the Intel Architecture Group, the Wireless Communications and Computing Group, the Communications Products Group, the Network Communications Group and the New Business Group. Each group has a vice president who reports directly to the Chief Executive Officer (CEO). The CEO...

  • Page 42
    ... 13% of the company's revenues and another accounted for 11%. A substantial majority of the sales to these customers were Intel Architecture Group products. Geographic revenue information for the three years ended December 30, 2000 is based on the location of the selling entity. Property, plant and...

  • Page 43
    ... other acquisition-related intangibles and costs Purchased in-process research and development Net income Basic earnings per share Diluted earnings per share Dividends per share(A) Declared Paid Market price range common stock(B) High Low (In millions-except per share amounts) 1999 for quarter ended...

  • Page 44
    ... basis. During 2000 and 1999, sales of microprocessors and related board-level products, including chipsets, based on the P6 micro-architecture (including the Intel® Celeron™ Pentium® III and Pentium® III Xeon™ processors), which are included in the Intel Architecture Group's operations...

  • Page 45
    ... due to increases for the Intel Inside cooperative advertising program, merchandising spending related to new product launches and profit-dependent bonus expenses. Amortization of goodwill and other acquisition-related intangibles and costs increased to $1.6 billion in 2000 compared to $411 million...

  • Page 46
    ...acquisitions In March 2000, we acquired GIGA A/S. GIGA specializes in the design of advanced, high-speed communications chips used in optical networking and communications products that direct traffic across the Internet and corporate networks. One project, in the 10 gigabit-per-second product group...

  • Page 47
    ... in total increased in 2000, with raw materials, work-in-process and finished goods inventory all contributing to the increase. For 2000, accounts receivable increased due to higher revenues and reflected a moderate increase in the days' sales outstanding. Our five largest customers accounted for...

  • Page 48
    ... Xeon processors for mid-range and high-end servers and workstations. In the fourth quarter of 2000, we introduced a new generation of microprocessors based on our new Intel® NetBurst™ micro-architecture under the Pentium® 4 brand name. The Pentium 4 processor is designed for home and business...

  • Page 49
    ...segment supports initiatives to deliver component-level networking products to OEMs building communications systems for home and small and mid-sized businesses. Networking products include network processors, network connectivity products including wireless network cards, embedded control chips and...

  • Page 50
    ... additional acquisitions, intentions regarding building new businesses around the Internet, the number of computers using Intel processors, gross margin and costs, capital spending, depreciation and amortization, research and development expenses, headcount reduction expectations, the tax rate...

  • Page 51
    .... Intel Technology Sdn. Berhad Level One Communications, Inc. Mission College Investments Limited Costa Rica Delaware, USA New Jersey, USA Denmark Cayman Islands United Kingdom Israel Netherlands Cayman Islands Japan Delaware, USA California, USA Malaysia California, USA Delaware, USA Philippines...

  • Page 52
    San Jose, California March 9, 2001